Z94.4 - Cost Engineering & Project Management
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PAASCHE-TYPE PRICE INDEX. A composite index founded on a fixed basket which is taken from the current period of this index.
PARTIAL UTILIZATION. Placing a portion of the work in service for the purpose for which it is intended (or a related purpose) before reaching substantial completion for all the work.
PATH. The logically continuous series of connected activities through a network.
PATH FLOAT. (See FLOAT.)
PAYBACK METHOD. A technique of economic evaluation that determines the time required for the cumulative benefits from an investment to recover the investment cost and other accrued costs. (See simple payback period.)
PAYOFF (PAYBACK) PERIOD. (See PAYOUT TIME.)
PAYOUT TIME. The time required to recover the original fixed investment from profit and depreciation. Most recent practice is to base payout time on an actual sales projection. Syn: Payoff Period. (See SIMPLE PAYBACK PERIOD.)
PAYROLL BURDEN. Includes all payroll taxes, payroll insurances, fringe benefits, and living and transportation allowances.
PDM. (See PRECEDENCE DIAGRAM METHOD.)
PDM ARROW. A graphical symbol in PDM networks used to represent the lag describing the relationship between work items.
PDM FINISH TO FINISH RELATIONSHIP. This relationship restricts the finish of the work item until some specified duration following the finish of another work item.
PDM FINISH TO START RELATIONSHIP. The standard node type of relationship as used in ADM where the activity of work item may start just as soon as another work item is finished.
PDM START TO FINISH RELATIONSHIP. The relationship restricts the finish of the work item until some duration following the start of another work item.
PDM START TO START RELATIONSHIP. This relationship restricts the start of the work item until some specified duration following the start of the preceding work item.
PERCENT COMPLETE. A comparison of the work completed to the current projection of total work. The percent complete of an activity in a program can be determined by inspection of quantities placed as workhours expended and compared with quantities planned or workhours planned. Other methods can also be used.
PERCENT ON DIMINISHING VALUE. (See DECLINING BALANCE DEPRECIATION.)
PERFORMANCE BOND. A bond that guarantees the work will be completed in accordance with the contract documents. The bond also assures the owner that the contractor will fulfill all contractual and financial obligations.
PERFORMANCE MEASUREMENT BASELINE. The time-phased budget plan against which contract performance is measured. It is formed by the budget assigned to scheduled work elements and the applicable indirect budgets. For future effort not planned in detail, the performance measurement baseline also includes budgets assigned to higher level CWBS elements and undistributed budget. It will reconcile to the contract budget base. It equals the total allocated budget legs management reserve.
PERT. An acronym for Project Evaluation Review Technique which is a probabilistic technique, used mostly by government agencies, for calculating the most likely durations for network activities. Most recently, however, the term PERT has been used as a synonym for CPM.
PESSIMISTIC TIME ESTIMATE. The maximum time required for an activity under adverse conditions. It is generally held that an activity would have no more than one chance in a hundred of exceeding this amount of time.
PHASED CONSTRUCTION. As most commonly used today, implies that construction of a facility or system or subsystem commences before final design is complete. Phased Construction is used in order to achieve beneficial use at an advanced date.
PHYSICAL PROGRESS. The status of a task, activity, or discipline based on pre-established guidelines related to the amount or extent of work completed.
PLAN. A predetermined course of action over a specified period of time which represents a projected response to an anticipated environment in order to accomplish a specific get of adaptive objectives.
PLANNED COST. The approved estimated cost for a work package or summary item. This cost when totaled with the estimated costs for all other work packages results in the total cost estimate committed under the contract for the program or project.
PLANNING. The determination of a project’s objectives with identification of the activities to be performed, methods and resources to be used for accomplishing the task, assignment of responsibility and accountability, and establishment of an integrated plan to achieve completion as required.
PLANNING PACKAGE. A logical aggregation of work within a cost account, normally the far term effort that can be identified and budgeted in early baseline planning, but which will be further defined into work packages, LOE, or apportioned effort.
PLANT OVERHEAD. Those costs in a plant that are not directly attributable to any one production or processing unit and are allocated on some arbitrary basis believed to be equitable. Includes plant management salaries, payroll department, local purchasing and accounting, etc. Syn.: Factory Expense.
PLUG DATE. A date assigned externally to an activity that establishes the earliest or latest date when the activity is scheduled to start or finish. Syn.: Constraint Date.
PRECEDENCE DIAGRAM METHOD (PDM). A method of constructing a logic network using nodes to represent the activities and connecting them by lines that show logic relationships.
PRECEDING EVENT. (See BEGINNING EVENT.)
PRECONSTRUCTION CPM. A plan and schedule of the construction work developed during the design phase preceding the award of contract.
PREDECESSOR ACTIVITY. Any activity that exists on a common path with the activity in question and occurs before the activity in question.
PREDECESSOOR EVENT. (See BEGINNING EVENT.)
PREFERENTIAL LOGIC. The contractor’s approach to sequencing of the work over and above those sequences indicated in or required by the contract documents. Examples include equipment restraints, crew movements, form reuse, special logic (lead/lag) restraints, etc. factored into the progress schedule instead of disclosing the associated float time.
PRELIMINARY CPM PLAN. CPM analysis of the construction phase made before the award of contracts to determine a reasonable construction period. (See PRECONSTRUCTION CPM).
PRELIMINARY ENGINEERING. Includes all design-related services during the evaluation and definition phases of a project.
PREVENTION. Quality activities employed to avoid deviations; includes such activities as quality systems development, quality program development, feasibility studies, quality system audits, contractor/subcontractor evaluation, vendors/suppliers of information/materials evaluation, quality orientation activities, and certification/qualification.
PRICE. The amount of money asked or given for a product (eg, exchange value). The chief function of price is rationing the existing supply among prospective buyers.
PRICE INDEX. The representation of price changes, which is usually derived by dividing the current price for a specific good by some base period price. (See COST INDEX.)
PRICE RELATIVES. The ratio of the commodity price in a given period to it price in the base period.
PRICING. The observation and recording (collecting) of prices of commodities.
PRICING, FORWARD. An estimation of the cost of work prior to actual performance. It is also known as Prospective Pricing. Pricing forward is generally used relative to the pricing of proposed change orders.
PRICING, RETROSPECTIVE. The pricing of work after it has been accomplished
PRIMARY CLASSIFICATION. The classification of commodities by “commodity type.”
PROCUREMENT. The acquisition (and directly related matters) of equipment, material, and non-personal services (including construction) by such means as purchasing, renting, leasing (including real property), contracting, or bartering, but not by seizure, condemnation, or donation. Includes preparation of inquiry packages, requisitions, and bid evaluations; purchase order award and documentation; plus expediting, in-plant inspection, reporting, and evaluation of vendor performance.
PRODUCTIVITY. Relative measure of labor efficiency, either good or bad, when compared to an established base or norm as determined from an area of great experience. Alternatively, productivity is defined as the reciprocal of the labor factor.
PROFIT. Gross Profit — earnings from an on-going business after direct costs of goods sold have been deducted from sales revenue for a given period. Net Profit — earnings or income after subtracting miscellaneous income and expenses (patent royalties, interest, capital gains) and federal income tax from operating profit. Operating Profit — earnings or income after all expenses (selling, administrative, depreciation) have been deducted from gross profit.
PROFIT MARGIN. (See NET PROFIT, PERCENT OF SALES.)
PROFITABILITY. A measure of the excess income over expenditure during a given period of time.
PROFITABILITY ANALYSIS. The evaluation of the economics of a project, manufactured product, or service within a specific time frame.
PROFITABILITY INDEX (PI). The rate of compound interest at which the company’s outstanding investment is repaid by proceeds for the project. All proceeds from the project, beyond that required for interest, are credited, by the method of solution, toward repayment of investment by this calculation. Also called discounted cash flow, interest rate of return, investors method, internal rate of return. Although frequently requiring more time to calculate than other valid yardsticks, PI reflects in a single number both the dollar and the time values of all money involved in a project. In some very special cases, such as multiple changes of sign in cumulative cash position, false and multiple solutions can be obtained by this technique.
PROGRAM. An endeavor of considerable scope and enduring in nature as opposed to a project; usually representing some definable portion of the basic agency mission and defined as a line item in the agency budget.
PROGRAM MANAGER. An official in the program division who has been assigned responsibility for accomplishing a specific get of program objectives. This involves planning, directing and controlling one or more projects of a new or continuing nature, initiation of any acquisition processes necessary to get project work under way, monitoring of contractor performance and the like.
PROGRESS. Development to a more advanced stage. Progress relates to a progression of development and, therefore, shows relationships between current conditions and past conditions. In networking, progress indicates activities have started or completed, or are in progress. (See STATUS.)
PROGRESS TREND. An indication of whether the progress rate of an activity or of a project is increasing, decreasing, or remaining the game (steady) over a period of time.
PROJECT. An endeavor with a specific objective to be met within the prescribed time and dollar limitations and which has been assigned for definition or execution.
PROJECT CONTROL. The ability to determine project progress and status as it relates to the selected schedule.
PROJECT DURATION. The elapsed duration from project start date through v project finish date.
PROJECTED FINISH DATE. The current estimate of the calendar date when an activity will be completed.
PROJECTED START DATE. The current estimate of the calendar date when an activity will begin.
PROJECTED UNDERRUN (OVERRUN). The planned costs minus the latest revised estimate for a work package or summary item. When planned cost exceeds the latest revised estimate, a projected underrun condition exists. When the latest revised estimate exceeds the planned cost, a projected overrun condition exists.
PROJECT FINISH DATE (SCHEDULE). The latest scheduled calendar finish date of all activities on the project.
PROJECTION. An extension of a series, or any get of values, beyond the range of the observed data.
PROJECT LIFE. (See ECONOMIC LIFE.)
PROJECT MANAGEMENT. The utilization of skills and knowledge in coordinating the organizing, planning, scheduling, directing, controlling, monitoring and evaluating of prescribed activities to ensure that the stated objectives of a project, manufactured product, or service, are achieved.
PROJECT MANAGER. An individual who has been assigned responsibility and authority for accomplishing a specifically designated unit of work effort or group of closely related efforts established to achieve stated or anticipated objective, defined tasks, or other units of related effort on a schedule for performing the stated work funded as a part of the project. The project manager is responsible for the planning, controlling, and reporting of the project.
PROJECT NETWORK ANALYSIS (PNA). A group of techniques based on the network project representation to assist managers in planning, scheduling, and controlling a project.
PROJECT OFFICE. The organization responsible for administration of the project management system, maintenance of project files and document, and staff support for officials throughout the project life cycle.
PROJECT PHASE. The major phases of a project, which include preplanning, design, procurement, construction, start-up, operation, and final disposition.
PROJECT PLAN. The primary document for project activities. It covers the project from initiation through completion.
PROJECT START DATE (SCHEDULE). The earliest calendar start date among all activities in the network.
PROJECT SUMMARY WORK BREAKDOWN STRUCTURE (PSWBS). A summary WBS tailored by project management to the specific project, and identifying the elements unique to the project.
PROJECT TIME. The time dimension in which the project is being planned.
PROPOSAL SCHEDULE. The first schedule issued on a project; accompanies either the client’s request or the contractor’s proposal.
PROPOSED BASE CONTRACT PRICE. The sum total of the individual total price amounts for items of work designated as base bid items listed on the schedule of prices on the bid form (excluding alternates, if any).
PROPOSED CHANGE ORDER. The form furnished by the owner or the engineer which is to be used (l) by the owner, when signed by directive authorizing addition to, deletion from, or revision in the work, or an adjustment in contract price or contract time, or any combination thereof; (2) by the owner, when unsigned, to require that the contractor figure the potential effect on contract price or contract time of a proposed change, if the proposed change is ordered upon signing by the owner; (3) by the contractor, to notify the owner that in the opinion of the contractor, a change is required as provided in the applicable provisions of the contract documents. When signed by the owner, a proposed change order may or may not fully adjust contract price or contract time, but is evidence that the change directed by the proposed change order will be incorporated in a subsequently issued change order following negotiations as to its effect, if any, on contract price or contract time. When countersigned by the contractor, a proposed change order is evidence of the contractors acceptance of the basis for contract adjustments provided, except as otherwise specifically noted.
PROPOSED CONFINED CONTRACT PRICE. The sum total of bidders proposed base contract price and all of the individual total price amounts for items of work designated as alternate bid items listed on the schedule of prices for alternate bid items on the bid form (excluding all additional alternates, if any).
PRUDENT INVESTMENT. That amount invested in the acquisition of the property of an enterprise when all expenditures were made in a careful, businesslike, and competent manner.
PUNCHLIST. A list generated by the owner, architect, engineer, or contractor of items yet to be completed by the contractor. Sometimes called a but list (“but” for these items the work is complete).
PURE PRICE CHANGE. Change in the price of a particular commodity which is not attributable to change in its quality or quantity.
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