Cost Control System
The project work is based on Boston’s Central Artery/Tunnel Project was a megaproject within Boston which rerouted its central Artey of Interstate 93. The project work included with construction of Ted Williams Tunnel (extention of Interstate 90 to Logan International Airport). The plan is also included rail connection among Boston’s two major terminals of train. The planning of tunnel project began in the year 1982; construction work was being carried out among 1991 and 2006 (Artery, 2017). This project was considered as expensive highway project in US and it was failed because of cost overrun and time overrun. The other causes of failure in selected project are change of poor execution and use of standardized materials.
The report is based on analyzing the control system used for cost, schedule, scope and quality of the selected project. Reasons for cost and time overrun encountered in the project are analyzed to identify the causes behind the project failure. The project execution team should be responsible behind incur of both time and cost overrun so that their role in the project work is identified. The project management actions are also taken in consideration to improve and control the development as well as resources for increasing the possibility to deliver successful development work.
In this project, cost control system cuts the cost to improve the bottom line of the project. As there are issues in the project related to cost overrun, therefore cost control system is used to make savings and make sure that the project remains competitive in long run. The cost to complete the plan is included purchasing, production, sales, marketing, administration as well as facility management (Walker, 2015). The budget cost is higher than standard cost and lower than the standard cost. Cost control is an objective of the construction management as well as scheduling. It is identified that no amount of manual work is achieved in construction cost control. The cost control system enables the project manager to observe current cost level, compare them with the standard plans and take corrective actions to keep the project cost in acceptable bounds (Heagney, 2016). The system helps to recognize corrective actions required and provide pointers as to what are actions required. The contractor can wait until complete of the contract and then compare the project expenditure as well as project revenue. The information which is provided by cost control system help to induce corrective actions in the future contracts related to construction project. In the system, total project cost is compared with valuations of the gross. Cost of various project works is collected separately. The cost is divided by quantity of work for each type of project work (Verzuh, 2015). It is provided with unit costing which is compared to estimated cost in the project tender. From the project report, it is calculated that the project was completed by December 2007, and cost was being estimated at $14.8bn. After five years, the actual cost of this project is estimated more than $24bn. Therefore, there is extra of over $100m for the project plan.
Schedule Control System
The schedule control system address things as processes to schedule performance tracking of all the project activities and approval process of project plan. Schedule control can identify schedule variations and handle actual changes in developed project schedule. In tunnel construction project, the schedule changes are caused due to failure to attain planned date for the project activities and external directions like reallocation of the project funding (Braglia & Frosolini, 2014). The schedule control system includes processes to implement changes in schedule. That process can address requirements to keep the stakeholders and users as per assigned project work. It is considered as good database for the lessons learned. Information related to schedule variations, evaluation and development of proper actions is documented to members of the project team. The schedule control system provides baseline needs for the system and supports contractor for better planning. It is required to implement project management system for managing contract cost and performance of schedule (Kendrick, 2015). The project manager should determine the project cost by comparing the actual cost required with the estimated cost so that they can identify extra cost required to complete the plan.
The scope of this project is to complete the work on scheduled time and estimated cost, but later it is seen that the project is failed due to cost overrun and time overrun. Therefore, Tunnel Project is not able to control its scope, and there is scope creep. From the starting, the project scope is defined in detailed and provided features of the project which is delivered to project client (Nanda, 2016). The project takes significant time to produce project scope. The supplier to customer can achieve clarify about project scope. After all project estimation is completed and signed of contract, the team can collaborate for scope changes. Project scheduling software is taken as effective way to keep the team apprised to shift change in scope as well as resources (Pritchard & PMP, 2014). Controlling of project scope is rejection of changes that come with attention of project sponsor.
The quality control system collects the business processes required to meet with client’s requirements and raise the client satisfaction. It is a control of quality of products and quality assurance is control the project process (Stark, 2015). ISO 9000 standard fulfills quality requirements of the construction project. Inspection is an element for quality control where there is examination of physical products. In the project management, control of quality is required as the project manager and project team can inspect project works to make sure with alignment with project scope. This construction project is consisted of quality control team focused on area of construction (Kerzner & Kerzner, 2017). As this project work is based on construction of road or tunnel for Boston, therefore the project manager should identify quality of raw materials and products required for the construction work. Total quality management is originated in US and used in this project as this technique of statistical quality control drives for continuous improvement in the project plan.
Scope of the Project
The problem of cost and time overrun must be encountered during the progress of the project “Boston’s Central Artery/Tunnel construction” properly. The reason of cost and time overrun which are required are generally elaborated below:
Inaccurate project estimation: If the project estimation for the construction of Boston’s Central Artery/Tunnel is not done properly then estimation may suffer from wrong expectations of the scope of work that is added within the project (Todorovic et al., 2015). In addition to this, improper estimation of time and budget can cause overrun of cost and project time and as a result number of issues like project delay and financial issues generally can occur.
Serious project design errors: Even if the time and resources of the project are accurately estimated then also if the design that is created for the construction is defective then it is quite difficult for the project manager to finish the construction work within the assumed budget and time (Hornstein, 2015). It is found that design errors generally cause 38% disputes within the construction projects. If the project manager is unable to follow the design for the construction of Boston’s Central Artery/Tunnel, then a number of problems related to cost and time overrun generally occurs within the organization.
Improper planning for changing orders: Change order generally occurs when an owner, as well as contractor of the project, generally realizes that the design that is developed for the construction is not working and then that try to fix for resolving the problems. If proper planning is not made for changing orders, then the chances of cost and time overrun within the project is quite high that further helps in creating a number of problems.
Administration errors: Even if the design of the project is proper and the project managers are experienced still the project can face cost and time overrun as the administrator are not able to speed up with the progress of the entire project (Svejvig & Andersen, 2015). Even if small errors generally occur within the administration of the project then the chances of scope and time overrun are quite high that further creates a number of issues including project delay as well as financial issues within the project.
Plan of construction are not received on time: If the plan that is made for construction is not received by the contractors at proper time then the chances of time overrun is quite high. Due to the extension of the project deadline for achieving the goals as well as objectives of the project, then the budget that is associated with the project generally increases (Sanchez, 2015). Thus, if the plan for construction is not received on proper time by the contractors then both cost and time overrun can generally occur within the entire project.
Quality Control System
Scope creep: If the problem of scope creep generally occur within the project then it will be quite difficult for the project managers to manage the cost and time of the project as per the initial planning which generally causes cost and time overrun within the entire project (Kaiser, El Arbi & Ahlemann, 2015). Thus, it is quite important to identify the problem of scope creep in the initial phase of the project so that the problems that are associated with cost and time overrun can be resolved quite effectively.
Improper management: If the project managers who are involved with the Boston’s Central Artery/Tunnel construction are not able to manage the project effectively as per the initial planning of the project then the chances of cost and time overrun within the project can generally increase which generally can cause number of issues as well as problems in the project (Papke-Shields & Boyer-Wright, 2017).
Inadequate resources: If the resources that are required for the construction of Boston’s Central Artery/Tunnel are not estimated properly in the initial phase of the project then it will be quite difficult for the project managers to manage the project effectively as per the assumed budget and time. Thus, it is found that inadequate resources within the project can generally cause cost and time overrun within the project that must be effectively resolved during the progress of the project for avoiding the issues and challenges like financial issues as well as project deadline related issues.
Improper financial management: If the financial budget of the project is not managed effectively by the financial department of the organization then the chances of cost overrun generally increases within the entire project (De Carvalho et al., 2015). The problem of improper financial management must be resolved effectively during the progress of the project as it will generally create a financial burden on the project managers so that the progress of the project can be obstructed.
Weather conditions: If bad weather condition related issues within the project occurs during the construction of Boston’s Central Artery/Tunnel then the time that is required for construction of the tunnel increases due to the obstruction. The increment in the time or deadline of the project generally helps in increasing the budget of the project and as a result the problem of cost overrun generally occurs.
Increase in cost of materials: If the cost of the materials, as well as other types of resources that are mainly used for the construction of Boston’s Central Artery/Tunnel, generally increases then it will be quite difficult for the project managers to manage the project within the budget that is assumed at the initial phase and as a result cost overrun occurs (Andersen, 2016). The problem of cost overrun further creates a number of financial challenges as well as issues within the project and therefore the problems must be resolved during the progress of the project.
Reasons for Cost and Time Overrun
Wastage of available resources: The resources that are present if not properly managed by the project manager then there will be a deficiency of project resources. Deficiency of project resources generally increases the budget for the project resource which further can cause cost overrun within the entire project (Kaiser, El Arbi & Ahlemann, 2015). Thus, it is found that the problem of cost overrun must be effectively resolved during the progress of the project for avoiding further issues.
The execution team is responsible to involve in road infrastructure project undertaken to modify flow of traffic, alleviate congestion across Boston and replace outdated elevated Central Artery road which can split city in half. It is seen that when the project is completed by December 2007, then the cost is estimated at $14.8bn. In July 2012, the actual cost of this project is estimated more than $24bn. It is analyzed that the current pay is over $100m in the debt services for the project plan. The project work will continue till 2038. The main aim of this project is to reduce congestion of traffic and improve mobility in oldest America’s and congested cities of US (Artery, 2017). In any construction project of Boston, both cost and time is considered as most significant factors towards successful completion of project. The project manager can make control over both time and cost to make sure that the project is to be competed on scheduled time (Harrison & Lock, 2017). Therefore, it is main responsibility of project execution team to execute the plan properly by completing it in scheduled time and estimated budget. The road infrastructure project is delayed of many years due to various issues. Following are role of project execution team to acquire cost and time overrun such as:
- The project execution team can review the project requirements as well as audit products for project compliance. There is performance of issues management and products when required (Walker, 2015).
- The team can develop and maintain project requirements documentation. They can finalize the requirements of project documentation as required.
- The execution team is also focused on change to the business processes, technical functions and roles as well as responsibilities of the project team (Larson et al., 2014). The organizational structure of the project organization is also analyzed by the team so that they can determine the change in project budget and project schedule (Kerzner, 2018). There is not documentation of the project as per project goals as well as objectives.
- The team can focus on ensuring that the business mission as well as assets of IT is aligned. There is delivery of system architecture for supporting, effective as well as secured business environment (Mir & Pinnington, 2014). All the system architecture for building the tunnel is not done accurately.
- The project execution team has properly analyzed the project time as well as schedule so that there is no possibility of delay of the project plan (Svejvig & Andersen, 2015). While it is seen that there is a delay in the plan as the team is not focused to plan the project as per client’s requirements.
From above mentioned points, it is identified that project execution team is responsible for incurring project cost and time overrun as the team is not provided with required requirements of construction project and also not updated the plan as per scheduled time (Steyn et al., 2016). The project draft is not reviewed by them; therefore there is delay in completion of work.
The identified problems in the construction project are inaccurate estimation of project, serious error of project design, administration error, scope creep, improper management, and improper planning (Braglia & Frosolini, 2014). There are other issues related to the construction work such as inadequate resources. Those problems are related to each other as those are causes of time as well as cost overrun. Due to this, the project is not completed within scheduled time. The project work is not delivered to the client based on their requirements and their expectations. Due to poor project cost and poor time management, the industry is required a high overrun in the cost (Mir & Pinnington, 2014). Poor management and overrun is a main issue and it provides a huge impact on the emerging countries.
Inaccurate Project Estimation
In this particular project, there is high increase in complexity of project as the project is large and there is high demand to deliver the work on scheduled time. In the traditional project work, the contract of project is awarded with low bidder to develop the construction related project work. In this project, a high amount of money is spending to complete the work (Todorovi? et al., 2015). Delay in time caused due to lack of project resources as proper hiring of workers is not done based on their expertise and skills to work in construction project. Improper project planning is done in the project as the project manager is not interested to plan the work as per scheduled, therefore it causes increase in cost due to addition to extra project resources. Scope creep is caused when the project manager plus project team members are not able to meet with project aims and objectives (Chih & Zwikael, 2015). Those issues which are identified based on the area where the project is carried out and where the construction work is performed. In order to complete the project work, quality of materials is one of the main requirements to complete the work on time. Therefore, the project is required to maintain a high quality as it is considered as one of main factor which is required to control. The project team members are responsible behind not completing the project on time as they are required to complete it on scheduled time (Kendrick, 2015). In addition to all this, it is identified that all project problems are linked to each other which cause cost as well as time overrun in the construction work related to tunnel project. It is main responsibility of project manager to complete the work on time and meet with client’s requirements for successful project completion.
Hornstein (2015) stated that monitoring and controlling of the road construction work is involved with tracking actual performance of plan with planned project activities. The control functions look at project stages from project initiation to closing. The project management actions which are taken to control the project performance are change request, update to project plan and documents. The project manager should come across the changes which are occurred throughout the plan (Serra & Kunc, 2015). When the products are failed to meet acceptance criteria, then there is required to change in project vendor. The project team members should have proper skills to manage staffs and they should have skills to use project management software. Change control is performed to take preventive actions. The project management actions taken should cause change in plan, project baseline, project charter and statement of the project work (Todorovi? et al., 2015). The project control system aims to reduce gap among project planning as well as project execution to attain project goals such as cost, time, scope and quality.
Serious Project Design Errors
The project management action plan is required to carry out and achieve the project objectives for project completion on scheduled time. Project management software such as Ms Project is used to schedule the project plan (Harris, 2017). The software is used to manage the project, get project resources as well as finances under project control. The project is evaluated and tracked based on time in addition to cost. MS Project provides clearer way to break down the project, builds the schedule and allocates the project resources. The application is good for construction project as it is designed to assist the project manager for development of plan, assign the resources to project tasks, track the project progress, manage project budget and analyze workloads (Turner, 2017). The project manager makes a plan consisting of project activities. The purpose of monitoring is provided an understanding of project progress as well as communicating the project status. Throughout the project planning phase, the plan is developed in form of project baselines for time, cost, scope, quality and project risks (Chih & Zwikael, 2015). It provides the project manager with a basis to monitor the project progress.
There is required to make an improvement of project guide and help so that it provides set up the project, manages the tasks and reports project related information. The project guide helps the project management process and customizes various methodologies (Harrison & Lock, 2017). It is available to the online access to the training courses, project management templates as well as project resources. It is also a communication tool which can produce customer reports as per stakeholder’s requirements. This software is identified as default working hour in the assigned time. It is identified as milestone for project deliverables (Braglia & Frosolini, 2014). The software is used by the project manager to view like Gantt chart, network diagram, resource graph and sheet, tracking chart as well as resource usage.
Conclusion
It is concluded that Boston’s Central Artery/Tunnel Project is failed due to cost as well as time overrun. The project management tool is used to deliver the project on time, reasonable cost and quality. This project is targeted towards finance, design, and implementation and operating of IT infrastructure facilities plus services. The factors which are responsible for time overrun and cost overrun is identified by going in-depth through the project plan document. Delay in the construction contract is an issue in the construction of tunnel projects. Delay is occurred throughout negotiation plus sign of concession agreement as compared to construction phase. The project execution team is responsible to better control of project management activities and delivery of project work on time. It is required to control the overrun of cost and time with it is required to make real distinction among project work.
Improper Planning for Changing Orders
An analysis of both cost as well as time overrun of the construction project in Boston is based on cost as well as time means there is deviation. Deviation of time suggested that time overrun is critical in the construction projects of tunnel construction. The time overrun is more critical as compared to cost overrun as in this project, it takes more time to complete with time mentioned in project contracts. It is expected to lead for better control of the cost as well as time help to identify alternative solutions to avoid cost as well as time overruns. In order to reduce both overrun, project management software is used as an action to avoid them. This software will help to plan entire work as per planned project activities. For each project activities, project resources are assigned among project team members based on their expertise and skills. Therefore, there is high role of human to escalate overrun for time and cost.
In view of the previous analysis from the project report, following points are to be recommended to improve construction projects performance in Boston based on cost and time such as:
- It is recommended that the construction parties should develop plan and program to train the staffs to make improvement in skills plus qualifications throughout human resource presence responsible for handling training of staffs.
- Effective road construction is important aspect which can influence project lifetime. Design errors are occurred because of improper level of experiences, engineering assumptions and improper data. The construction industry should employ designers to overcome with those issues based on project objectives.
- It is recommended that the project owner makes sure that there are funds which are available for the project before it is commissioned. Throughout bidding process, it is required to check financial abilities for competitors to reduce risk awarding contract.
- It is recommended to make a technical study related to project characteristics before introduction of tender. It helps to identify factors, risks plus uncertainties which may affect to estimate project cost.
References
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