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Introduction
The Malaysians Auditor General 2008 report suggests the
cost overruns significantly affect the viability of construction
projects in Malaysia.
The clients and the contractors suffer great financial loss
and it causes disputes which turn down the overall project
progress.
For example, the audit report revealed that delay in project
completion of Electrified Double Track Project between
Rawang and Ipoh resulted in a cost overrun of RM 1.43
billion [1].
A delay in carrying out the project activities causes
deviation from the approved time and cost baselines.
Terms
1. BCWS (Budgeted Cost of Works Scheduled)
the baseline for the analysis, cumulated planned costs related to time of their
incurrence;
- The value of work done that should have been done at a given point in time.
2. BCWP (Budgeted Cost of Work Performed )
a measure of physical progress of works expressed by cumulated planned cost of
works actually done related to time, it is also called Earned Value (like the method
it is used by);
- The value of the work done at a point in time.
3. ACWP (Actual Cost of Work Performed)
cumulated amount payable for works done related to time;
- The actual cost of the work done
4. BAC (Budget at Completion)
total planned cost of the whole project, it equals BCWS at the planned finish;
5. T planned duration of the project.
6. EVA (Earned Value Analysis)
- Compares the value of work done with the value of work that should
Work Example
A project has an original budget of RM
600,000 and after the first 4 months of a 12
months planned project time, the schedule
costs, actual costs and earned values are as
follows
M1
M2
M3
M4
Schedule
Cost
32,000
60,000
150,000
240,000
Actual Cost
35,000
70,000
160,000
250,000
Earned Value
(BCWP)
30,000
50,000
140,000
230,000
Questions
1)
2)
3)
4)
5)
6)
Solutions
Answer 1
6. Project Status
- Cost and time
- In term of cost , CPI if greater than 1, there have
been SAVINGS . However the value obtained <
than 1 (0.92) COST OVERRUN
- In term of time, SPI if less than 1, it indicates a
DELAY. However the value obtained < than 1
(0.96) - DELAY