project/activity percent complete

Project/Activity Percent Complete:

What Are We Measuring?

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Saleh MubarakSaleh A. Mubarak, Ph. D.

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Project/Activity Percent Complete:

What Are We Measuring?

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mail: P.O. Box 509 Eau Claire, WI 54702-0509 • telephone: 866-352-9539 • fax: 715-833-3953email: [email protected] • website: www.lorman.com • seminar id: 401185

Prepared By:Saleh Mubarak

Saleh A. Mubarak, Ph. D.

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© 2017 Lorman Education Services. All Rights Reserved.Lorman programs are copyrighted and may not be recorded or transcribed in whole or part without its express prior written permission. Your attendance at a Lorman program constitutes your agreement not to record or transcribe all or any part of it. This publication is designed to provide general information on the topic presented. It is sold with the understanding that the publisher is not engaged in rendering any legal or professional services. Although this manual is prepared by professionals, it should not be used as a substitute for professional services. If legal or other professional advice is required, the services of a professional should be sought.

This disclosure may be required by the Circular 230 regulations of the United States Treasury and the Internal Revenue Service. We inform you that any federal tax advice contained in this written communication (including any attachments) is not intended to be used, and cannot be used, for the purpose of (i) avoiding federal tax penaltiesimposed by the federal government or (ii) promoting, marketing or recommending to another party any tax related matters addressed herein.

The opinions or viewpoints expressed by the faculty members do not necessarily reflect those of Lorman Education Services. These materials were prepared by the faculty members who are solely responsible for their correctness and appropriateness.

Learn to identify the specific percent complete types and how to use them consistently.

Percent complete (for activities and projects) is one of the most confusing and misunderstood pieces of information in the field of project management and project control. There are many types of percent complete; each has a definition and measures something specific. Percent complete may measure physical work, units completed, cost, time, manhours, or other parameters. It could reflect the baseline or actual performance. Being ignorant in this matter makes you vulnerable to misinformation and misrepresentation. It is of vital importance for the project management team, representing all parties, to identify the specific percent complete types used, understand them well, and be consistent in using them throughout the project and across the organization.This material sheds the light on this topic in a simple and practical manner. It provides invaluable information to those involved in the management of construction projects.

CourseDescription

4

LearningObjectives

At the end of the this course, participants will be able to:

1. You will be able to describe the different methods for measuring work progress.

2. You will be able to recognize the use and importance of percent complete.

3. You will be able to discuss methods to measure work progress.

4. You will be able to explain the definition of percent complete.

Activity, Project, or Program?

What we do, falls under one of these…

or, in between them!

Percent Complete, Dr. Mubarak 7

Task / Activity

ProjectProgramWork

Package

5

Example

Program: Summer Olympic 2020 in Tokyo

Project: Constructing a new building to house athletes

Work Package: Foundation or Roof assembly

Activity: One spread footing

Task/Step: Setting the formwork for the spread footing


Definition of Percent Complete

Percent Complete: An estimate, expressed as a percent of the

amount of work that has been completed on an activity or a work

breakdown structure component.

(PMI PMBOK, 6th ed., 2017)

Schedule Percent Complete: The proportion of an activity or all

the project’s activities that has been completed.

(AACE® International RP No. 10S‐90, Cost Engineering Terminology, Nov 2014)


6


Percent Complete: A completion percentage of the

work in an activity / work package / project, based on a

chosen method of measuring work progress

A work package can be as small as concrete column

(formwork + rebar + concrete placement + other), as

big as the concrete shell of an entire building shell, or

somewhere in between such as the foundation.



Elements in a work package / assembly are usually

logically related. Elements in a WBS element or a

segment of the project can be grouped / linked by logic,

location, or other criteria. For example the foundation

or an entire floor of the building.

Pre‐manufactured modular units are not considered

work packages because they are delivered already

assembled


7

Percent Complete, Dr. MubarakSlide No.

12

160000

100000

Tam

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Off

ice

Bld

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110000

Foun

dati

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Subs

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ell

130000

Ext

erio

r cl

osur

e

140000

Inte

rior

fi

nish

es

150000

Mec

hani

cal

/ E

lect

rica

l

Site

Wor

k

121000

Col

umns

122000

Shea

r W

alls

123000

Ele

vate

d

Slab

s

124000

Bea

ms/

G

ird

ers

125000

CIP

Sta

irs

123100

Pos

t-te

nsio

ned

Sl

abs

123200

Flat

Sla

bs

123300

Waf

fle

Slab

s

123400

One

-way

Sl

ab a

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123110Fa

lsew

ork

123120

Reb

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123130

Pos

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ble

123140

Con

cret

e

123111

Soff

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123112

Scaf

fold

(t

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s)

123113

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123114

Res

hore

s

Level 0

Level 1

Level 2

Level 3

Level 4

Level 5

Work Breakdown Structure, WBS

Work Breakdown Structure, WBS


Level

0

1

2

3 to 6

8

Use of Percent CompleteActivity % Complete Project % Complete

1. To estimate progress payments

2. To update activities’ remaining

duration in schedule updates

Subsequently, recalculate upcoming

activities’ dates and project

completion date

3. As a component for calculating

work package / project percent

complete

More important than project %

complete

1. Often used to report to the

client or the upper management

(just to get an idea)

2. To calculate the overhead cost

3. Can be used for approximate

financial arrangements

4. Rarely, if ever, used to authorize

progress payments or make

decisions on a project


Methods to Measure Work Progress

1. Units completed

Physical percent complete

2. Start/finish

3. Supervisor Opinion

4. Cost/Budget Ratio:

a. Actual

b. Baseline

5. Man‐hour Ratio:

a. Actual

b. Baseline

6. Duration Ratio:

a. Actual

b. Baseline

7. Incremental milestones

8. Weighted or Equivalent

Units

9. The “Workday” Unit Method


9

Units Completed Method

Percent Complete = Units Completed / Total Units

Example: In an activity of installing 4,000 concrete blocks, 1,200 have been

installed:

Percent complete = (1,200 / 4,000) * 100 = 30%

Assumptions:

Work is assumed to be linear throughout the activity

A “unit is a unit”, i.e. all units take the same effort / time

This method works great for activities with small identical

repetitive components such as laying bricks or CMU (concrete

masonry units), painting, installing tile or carpet, excavation,

fishing electric wire, etc.

16Percent Complete, Dr. Mubarak

Units Completed Method

In some cases, total units may be different from the estimated

quantity.

For example, assume:

Original estimated amount of excavation = 45,000 CY

Actual excavated amount = 18,500 CY

Estimated amount to complete = 30,300 CY

Total amount at completion (Adjusted Total Amount) = 18,500 + 30,300 =

48,800 CY

Percent Complete (Actual) = 18,500 / 48,800 = 37.91%

Most likely, there will be a change order in this case


10

Physical Percent Complete

Physical Percent Complete is almost the same as Units

Completed method. The main difference is:

In the Units Completed method, “units” are discrete (usually

countable) while in the physical percent completion, units may not

be discrete but can be measured or estimated, e.g. gallons of water,

concrete placed, land area cleared.

In general, the two methods use the same calculations and can

be considered the same

In both cases, there is an assumption of “uniformity / similarity” of

units


Start/Finish Method

This method works best for small activities or those with or

short duration

The project manager can assign one of three stages:

have not started yet (0%),

started by not yet finished: An arbitrary amount, say 40% or

50%, or

finished (100%).

When these activities become so small, we can look at

them as “almost events” with either 0% or 100% complete.


11

Supervisor’s Opinion Method

The most subjective method. It is used when no other

method can suitably apply.

For example, an “engine tune up”, a repair, restoration, or

“dewatering” operation.

It relies totally on the judgment of the foreman or

superintendent.

The scheduler has to be careful not to overuse this

method.


Cost or Man‐hour Method

This method applies to those activities that are continuous and

uniform throughout the entire or part of the duration of a project.

For example, Safety Inspection, supervision, and other project‐

management type activities.

Actual Cost/Budget or Man‐hours Ratio:

• % complete = Actual cost to date / Estimate cost at completion

• % complete = Actual MH to date / Estimate MH at completion

Baseline Cost/Budget or Man‐hours Ratio:

• % complete = Budgeted (planned) cost to date / Baseline Budget

• % complete = Budgeted (planned) MH to date / Baseline MH Budget


12

Cost or Manhour Method

This method can be applied to calculate percent complete of an

activity, work package, or the entire project.

Baseline ratio represents what percent complete is supposed to

be at this point.

A comparison between actual and baseline % complete is good for

project control purposes

Example: Project overhead expenses are estimated to be $252,000 for

a project with a duration of 18 month ($14,000/month). After two

months, actual spending was $30,700.

Actual percent complete = $30,700/252,000 = 12.2%

Baseline percent complete = $28,000/252,000 = 11.1%


Duration Ratio

This method is suitable for tracking time; how much

passed as a percentage of the total duration.

Actual Duration:

% Complete = Actual Duration / At Completion Duration

At Completion Duration = Actual Duration + Remaining

Duration

Baseline Duration:

% Complete = Planned duration to date / Total BL Duration

Planned duration to date = Data Date – BL Start Date

Comparing actual and baseline percent complete tell us if

the project is ahead, on, or behind schedule.

23

13

19 days

Duration Ratio: Example

Project percent complete:

Actual Duration % Complete = 16 / 33 = 48%

Baseline Duration % Complete = 19 / 32 = 59%

24

16 days33 days

32 days

Importance of Accurate RD

Updating remaining duration is extremely important

Assume an “Excavation” activity with 8 days of original

duration (OD)

Four days after starting, only 30% was completed

AD = 4, Percent Complete = 30%

You need to update remaining duration (RD), say 9 days

If you failed to do so, you may be showing the wrong

dates for the successors and project completion date


14

Importance of Accurate RD

Percent complete must use the updated “At

Completion Duration” in calculations

At Completion Duration = Actual Duration + Remaining Duration

Except in baseline percent complete

Strange Percent Complete Numbers: Explanation?


Variances

Typically, we will find differences between the “As

Planned” and the “As built” in terms of percent

complete to cost, man‐hours, and duration

Do not rush to judgement

The cause of the variance may be in the performance or

baseline. It may be the fault of the contractor, the owner,

another party, or nobody’s!

Some variances are tolerated and some are not.


15

Incremental Milestones Method

This method is more suitable to large and complex or multi‐

stage activities including work packages / assemblies.

Each stage is given a “weight” that is approximately equal to

its percentage share of effort out of the total activity. Then

each stage is treated as “all or nothing”.

Example: a contractor is installing 25 doors:

Four doors have not yet started,

Eight doors have the frame erected, say 30% complete,

Six doors are hung, say 50% complete,

Four doors have been painted, say 75% complete, and

Three doors completed.


Incremental Milestones Method


Must add up to 100%

16

Weighted or Equivalent Units Method

This method is used for large and complicated activities that are

usually composed of several consecutive / overlapping sub‐

activities. The method follow the following steps:

Assign a weight to each sub‐activity so that total weights = 100%

Multiply each sub‐activity’s weight by the quantity of the total

activity. This is the “equivalent weight” in units for each sub‐activity.

Find out individual sub‐activities’ percent complete using one of the

previously discussed methods.

Multiply each sub‐activity’s percent complete by its “equivalent

weight”. This is “earned quantity”.

Add “earned quantities” for all activities and divide by total quantity.

This is the percent complete for the total activity.


Weighted or Equivalent Units Method


Equivalent MBF = Assigned weight * Total MBF = 0.08 * 3.50 = 0.28Earned MBF = (Completed Quantity/Total Quantity)* Equivalent MBF

= (8 / 12) * 0.28 = 0.19Total Activity % Complete = Earned MBF / Total MBF = 1.97 / 3.50 = 56.3%

17

Primavera P6 “Steps”


Why a Complex Activity?

It is natural that some work components are complex,

so what should we do?

Consider the work package as an activity and then use

one of these methods to measure its progress, or

Consider each of the components as a stand‐alone

activity and then use WBS or P6 “Level of Effort”

(Hammock) activity to look at the work package?


18

The “Work‐Day” Unit Method

percent complete = 20/39 = 51.3%

Activity IPA Original Duration

Actual Duration

Remaining Duration

A - 7 7 0 B A 12 9 3 C A 6 4 2 D B, C 5 0 5 E D 9 0 9

Total 39 20 19

34

Data date

A

B

C

D

E

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34

The “Work‐Day” Unite Method

This method assumes a “day” is a day’s worth no matter what

activity or other considerations.

What is the percent complete?

Waiting period: a lag or part of the duration?

Are we reporting baseline or actual?

35

Data Date

Percent Complete, Dr. Mubarak

A

B

C

2 4 6 80

(2 / 6)*100 = 33%

19

Comparison Among All Methods

These methods do not measure the same thing and certain

methods may be more appropriate to the situation than other

methods.

Suitability of methods differ according to:

Nature of activity

Purpose of the percent complete

Things in reality are not are as well‐defined as we like to have, in

order to decide on which method to use.


Comparison Among All Methods

In most of these methods there is an element of subjectivity

(Supervisor’s Opinion method may be blended with other

method)

However, to reduce the element of subjectivity, make the activity

smaller, simpler, more homogeneous, and shorter duration

Even if the activity is made of similar units (e.g. CMU), some

factors may result in varying productivity such as location

(height) of installed units, learning curves, and weather

conditions.

Rule of duration confidence!


20

Percent Complete Example

Assume a work package with three activities:

The first two activities are (A and B) identical. Each one requires the

installation of an interior hollow‐core wood door which cost $200

each (including hardware). Installation of these doors requires one

laborer for 2 hours for each door.

The third activity, C, requires the installing of hand‐carved

decorative exterior door that costs $2,200 and takes three laborers

for 3 hours.

A man‐hour costs $40. Activities A

and B are to be performed

simultaneously, and then activity C.


1 2 3 4 5 hours

A

B

C

Percent Complete Example

Total cost of activities A and B =

$200 + 1 laborer * 2 hours * $40/hr = $ 280 each

Total cost of activity C =

$2,200 + 3 laborers * 3 hours * $40/hr = $2,560

Total cost for project = 2 * $280 + $2,560= $3,120

Total man‐hours for project = 2 + 2 + 3*3 = 13 man‐hours

Total duration for project = 2 + 3 = 5 hours


21

Percent Complete Example: Update

Activities A and B are now complete but the doors actually cost the

contractor $230 and took an extra hour for installation, i.e. 3 man‐

hours (one laborer for 3 hours); each

Activity C has not yet started (no change is expected for cost or

duration)

What is the percent complete of this work package?


Data date

1 2 3 4 5 6 hours

C

A

B

Calculation of Percent Complete

1. Units completed:

Assume “a door is a door”

Percent Complete = Units completed/Total units

= 2 door / 3 door = 66.7%


22


2. Cost / Budget ratio:

Actual:

Actual cost for activities A or B

= $230 + 1 laborer * 3 hours * $40 = $350 each

Cost at Completion for work package = 2*350 + 2,560 = $3,260

Percent Complete = Actual Cost / Cost at Completion

= $700 / $3,260 = 21.5%

Baseline:

Percent Complete = Planned Cost / Original Budget

= $560 / $3,120 = 17.9%



3. Man‐hour ratio:

Actual:

Actual man‐hours for activities A or B = 3 + 3 = 6

Total man‐hours at Completion for work package = 6+9 = 15

Percent Complete = 6 / 15 = 40%

Baseline:

Percent Complete = 4 / 13 = 30.8%


23


4. Duration:

Actual:


Baseline:



1 2 3 4 5 hours

A

B

C

Data date

1 2 3 4 5 6 hours

A

B

C


5. Workday Unit (work-day or work-

hour unit):

Actual:


Baseline:



1 2 3 4 5 hours

A

B

C

Data date

1 2 3 4 5 6 hours

A

B

C

24


6. Supervisor’s opinion:

The foreman "believes" the work package is about 55%

complete!


Are You Confused Yet?

So, what is the true percent complete: 66.7%, 57.1%,

50%, 40%, 30.8%, 21.5%, or 17.9%, or 55%?

Which one should I use?

None of the previously discussed methods is wrong

but none of them can be considered the right method.

Most importantly:

Know exactly what each percent complete means

Pick one or two types to use

Be consistent with the chosen ones throughout the project


25

More Examples

To emphasize the previous example, think of:

A contractor has two tasks of excavation: 10,000 CY of

sand @ $3.00/CY and 10,000 CY of rock @ $25/CY. He

finished excavating the sand, so what’s his percent

complete?

Think of excavation as:

A work package, or

An activity

Is it just a cubic yard anyway?


More Examples

A contractor has to demolish two identical buildings:

one in an open space and one in confined space next to

occupied buildings. He completed the demotion of the

first one , so what’s his percent complete?

You got the point, right?


26

Primavera P6 Types of % Complete

Activity % Complete (15) Project % Complete (12)


Types of Percent Complete in P6


27

P6’s “Units % Complete”

Oracle Primavera P6 gives an option for calculating

percent complete:

Units here mean units of the resource; e.g. man‐hours

P6 has equation to calculate percent complete of both

Duration and Units, but the user needs to input the

Physical percent complete


P6’s “Units % Complete”

For example, in an update for an activity:

50% of the duration passed,

We consumed 70% of the resources (units),

But we achieved only 33% physical completion


28

Remaining Duration and Percent Complete

If work progress in an activity did not go as planned,

and the Percent Complete type was “Physical”, the user

needs to input both remaining duration and actual

percent complete.

Expected completion is an option that calculates

remaining duration


P6: Past in the Future?

Oracle Primavera P6 allows you to mark future dates as

actual

This may lead to awkward percent

complete (but it shows as 0 in P6)

Percent Complete = AD / ACD

AD = Data Date – Actual Start

AD = ‐1 in this case


Data

Date

1 2 1 2 3 4

29

Software Issues

When your computer software gives you choices of different

percent complete types, try to understand what each type means

When rolling up / grouping activities, make sure what does the

group activity’s percent complete represents

When your schedule is neither cost loaded nor resource loaded,

have you ever wondered how does P6 give you the project %

complete?


Human Judgement

Software programs may offer some automated

processes in updating projects.

Schedulers have to be careful in using such processes by:

1. Knowing the rules of such process

2. Making decisions on exceptions to the rules

3. Reviewing the output and making sure it is correct

Personally, I refrain from using such automated

processes


30

Judgement Errors

People who are not familiar with the nature of the

construction industry (mostly owners):

Don’t rush to judgement! What you see may not be what it

really is

Guessing percent complete by what you see, may carry a large

error if you don’t know the steps

Schedulers who know the software rules but lack the

knowledge in scheduling concepts and construction, may

also lack the educated common sense judgement whether

to accept computer output, and how to interpret it.


It Could be a Deliberate Bias!

Since Progress Payments (periodic payments from

owner to contractor) depend largely on activities’

percent complete, there may always be a tug‐of‐war

game between owners and contractors, even if the

contract is lump‐sum

This is one of several ways contractors try to get early

money

Inaccuracies in the schedule may backfire if/when the

schedule is analyzed in a claim dispute case


31

Progress Payments

While contractors incur expenses on a daily basis,

owners make payments to contractors usually on a

monthly basis.

This payment is based on

Actual quantities / percent complete claimed by the

contractor and verified by the owner,

Unit price as mentioned in the Schedule of Values.

There are other issues such as retainage, penalties,

purchased but not installed materials, …


Schedule of Values

Schedule of Values: A detailed statement furnished by

a construction contractor, builder, or others,

apportioning the contract value into work packages. It

is used as the basis for submitting and reviewing

progress payments

It is part of the contract documents but may get

modified or supplemented by a change order


32

Activity Cost Distribution

Activity cost may not be distributed evenly (linearly)

over the duration of the activity. It is a user‐defined

item.

So, if the activity is 25%, “Actual Cost” may be higher

than 25% of total cost

This distribution may not be compatible with progress

payments unless the contract / owner approves it


Activity Cost Distribution in P6


33

Percent Complete and Progress Payments

Knowing the type of percent complete and its accuracy

is extremely important for the accuracy of progress

payments

Contractors tend to exaggerate in activity percent

complete, especially in high‐cost activities and those in

the early stage of the project


Final Recommendation

All data must be based on scientific principles and

rules, and must be consistent

Measurement tools and indicators need to be clear to

all project parties and spelled out in the contract

Documentation is equally important

Accuracy and fairness are ultimately good for everyone


34

Conclusion

Any Questions?

[email protected]

(813) 455‐9338


35

project/activity percent complete

Documents