Project Management

The owner's side of a highway job: what the work costs, when it gets done, and whether the money is well spent. Quantity and cost estimating, project schedules and economic analysis carry 6–9 of the 80 questions on the Transportation exam. The area leans on the Handbook rather than the design standards.

What the problems look like

Short calculations on public-agency projects, often with a plan, a bid tab or a network drawn out. Recurring shapes — pay-item take-offs priced in the bid unit (tons of HMA, cubic yards of base, square yards of milling); bid comparisons at estimated and as-built quantities; CPM networks with float, lags and crashing; bar charts, linear (time–location) schedules and earned value; and engineering economics — present worth, life-cycle cost, capitalized cost, gradients and incremental benefit–cost.

By exam day you should be able to —

• take off areas, volumes and weights — bank, loose or compacted — and price each in its pay unit;
• run a forward and backward pass with start-to-start and finish-to-finish lags, and read total and free float;
• crash a schedule at least cost and know when a second path turns critical;
• forecast EAC from cost performance to date;
• set up present worth, annual worth and capitalized cost over an analysis period, with salvage or remaining-life credit;
• rank mutually exclusive alternatives by incremental B/C.

Where people lose points

• Pay units: price each item in the unit it is bid in — tons need the material's own unit weight, square yards divide by 9 and cubic yards by 27, and a loose-measure item is paid on loose volume.
• Estimate vocabulary: a contingency covers undefined detail within the current scope; escalation, markup and scope growth are separate lines.
• Float: total float is LS − ES (or LF − EF); free float runs to the earliest successor's ES, net of any lag. Read each link type before you push dates through it.
• Crashing buys days only on the critical path; once a parallel path ties, a day has to come off both.
• Earned value: when the remaining work continues at the cost efficiency to date, forecast with the cost index (BCWP/ACWP), not the schedule index.
• Incremental B/C: compare in order of cost, use the change in benefits (a benefit that falls, such as a smaller crash-reduction saving, is a negative increment), annualize each alternative over its own life when each is replaced in kind; over a fixed study period, use the common period with residual credit; and leave sunk costs out.
• Factor periods: n counts periods, including a zero first year in a gradient; a perpetuity's A/i lands one period before its first payment, and a residual value at the end of the analysis period; discount each from that point.

Have these at your fingertips

The interest factors and tables, the CPM and earned-value relations, and the estimating conversions — and where they live in the Handbook.

Going deeper

• Engineering economics — the factor relations behind the life-cycle problems

Part of the Transportation exam. Practice this area with exam-real problems — the tutor walks any one you miss. → Start practicing free — free with an account.