Calculating cumulative inefficiency using earned value management in construction projects

Abstract

Delay is one of the major factors in the cost overruns that affect construction projects. Furthermore, delay may cause a cumulative impact or ripple effect on productivity. Even though there are various methods proposed in previous researches that are considered applicable for analyzing the damages resulting from delay, there are some limitations to previous approaches. Notably, they do not consider the realistic production rates of activities over time. Moreover, they do not reflect the ripple effects on the performance of the work remaining, after the completion of delay events. This paper, therefore, proposes a method, which is referred to as the COME method (combination of measured mile analysis and earned value management (EVM) incorporating probable production rates) that can reasonably calculate the cumulative damages due to delay, considering the feasible rates of production over time, and the ripple effects on productivity. The COME method includes the 'learning curve', and the 'earned value analysis' as research methodologies. Earned value management was utilized, to demonstrate and calculate the effects of the cumulative loss of productivity on the remaining work, as well as on the impacted work due to delay. An example analysis showed that the COME method is a feasible choice for damages calculation, considering probable production rates over activity progress, and indirect impacts on performance changes, after the completion of delay events. It is noted, however, that the COME method relies on the use of a subjective or availability of an estimated production rate for the estimate to complete calculations.