Project Manager's Playbook for Construction - Part 5 of 6

Understand cash flow dynamics in construction, from negative early cash flow to positive later, and learn how progress payment clauses and payment applications affect timely payments.

Establish a schedule of values to map contract price, discuss front loading ethics, and compare lump-sum versus cost-plus billing with lean waivers, stored materials, and pay timelines.

Walks through a pay application example in construction project management, highlighting cash-flow timing, retainage, and a line-by-line review of a schedule of values, with fair markup and pre-submission negotiation.

Review contract payment terms thoroughly, verify subs and suppliers pay applications, and monitor cash flow to prevent overbilling and front loading while maintaining timely communication.

Learn how to break a construction schedule into manageable parts, from owner-set duration to subcontractor activities and crews, and examine productivity, labor, units, and finishing on time.

Lead a classroom productivity exercise using paper airplanes to teach production planning, crew size, sequence, and compare planned productivity to actual results.

Learn how to read and use a labor report to track units, hours, productivity, and labor dollars, compare estimates to actuals, and identify reasons for gains or losses.

Explore why actual productivity differs from planned by examining crew experience and size, planning, morale, learning curves, site conditions, material and tool availability, inspections, design changes, weather, and safety.

Collaborate operations and preconstruction to set productivity targets, plan crews' tasks, and aim to complete the project on time and under budget; regularly review labor reports to adjust as needed.

Learn how to forecast project profitability by tracking the original budget, change orders, and money spent to date, then estimate future costs to determine the margin.

Break down the budget into design build, preconstruction, and general conditions, and forecast costs with a staffing matrix, home office supervision, equipment planning, and change orders.

Explore how cost of work drives budgets in construction, detailing subs and suppliers, base bids, reserves, and change orders, plus tracking issues with RAAM, TBD, and contingency.

Learn how to forecast a construction project's financial projections and outcome by evaluating original budgets, changes, and actual costs line by line, calculating revenue, costs, and margins.

Align estimates with the budget by involving operations early and securing clear scope and buyouts. Track productivity, cost, and schedule, and communicate budgets to key stakeholders with conservative forecasts.

Resolve conflicts, disputes, and claims at the project level by following a clear contract path and robust communication. Maintain meticulous record keeping and documentation to support dispute resolution.