CEC Value Engineering & Cost Control Flashcards

What is the purpose of a cost-loaded schedule in construction project management?

Answer: Assign budget dollars to schedule activities for cash-flow forecasting

A cost-loaded schedule ties budget amounts to schedule activities, enabling accurate cash-flow projections and earned value tracking throughout the project.

During a VE workshop, the FAST (Function Analysis System Technique) diagram is used to:

Answer: Map project functions from high-level to basic level to identify cost-reduction targets

FAST diagrams organize project functions hierarchically, revealing which functions are unnecessary or over-engineered and thus prime VE targets.

An earned value analysis shows SPI = 0.85 and CPI = 0.92. What does this indicate?

Answer: Project is behind schedule and over budget

An SPI below 1.0 means the project is behind schedule, and a CPI below 1.0 means it is spending more than planned for the work accomplished.

Which document formally records an approved VE change and adjusts the contract sum accordingly?

Answer: Change order

A change order is the contractual instrument that documents scope changes, including VE substitutions, and adjusts the contract price and schedule.

What is the difference between direct cost control and indirect cost control on a construction project?

Answer: Direct addresses field production costs; indirect addresses overhead and support costs

Direct cost control targets field labor, materials, and equipment tied to physical work, while indirect cost control manages project overhead such as supervision, temporary facilities, and insurance.

A Pareto analysis of construction cost overruns would focus corrective efforts on:

Answer: The 20% of causes responsible for roughly 80% of overruns

Pareto analysis applies the 80/20 rule, directing attention to the vital few cost drivers that cause the majority of budget problems.