CHAPTER 4

PERT AND CPM

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4-1 Introduction

 PERT and CPM were developed independently in the later part of 1950's.
 PERT and CPM are networks, a technique used for planning and coordinating large scale
projects.

PERT is a Program Evaluation and Review Technique

- The use of PERT began in 1958 through joint efforts to speed up the Polaris Missile project.

-The concept was formulated by the research team and is then called Program Evaluation and Review
Technique, which is simply called PERT.

-The use of PERT in this large scale project was proven successful in shortening the length of the project
completion time.

CPM is the Critical Path Method.

-Began in 1956

-Developed by J.E. Kelly of the Remington Rand Corp, and M.R. Walker of Du Pont

-Advanced scheduling and cost control methods.

-By April 1958, CPM in application was demonstrated in a real success.

CPM was designed as a tool for planning, scheduling, and control of construction work.

PERT was developed as a result of looking for an improved method of planning and evaluating progress
of a large-scale research and development program.

Although PERT and CPM were developed independently, they have a great deal in common.

For practical purposes, the two techniques are the same. Thus, comments and procedures described will
apply to both PERT and CPM project analysis.
A person in charge of each work and the project manager know what is supposed to happen and when it
is supposed to happen.

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4-2 PERT/CPM Project Requirements

In all major projects of the government, PERT and CPM network are a mandatory requirement.

Under Presidential Decree (PD) 1594, Prescribing Policies, Guidelines, Rules and Regulations for
government infrastructure contracts

- Estimates of work items, quantities, costs and PERT/CPM analysis of project activities.

On January 27, 1968, President Ferdinand E. Marcos issued Memorandum Circular No. 153

- Heads of departments and chiefs of bureaus and offices must change old Gantt Chart system to
PERT/CPM network.

On June 19, 1968, the Executive Committee for Infrastructure Program implemented the Presidential
Order in a letter to all implementing agencies to wit:

"Your attention is invited to a Presidential Order requiring the preparation of a PERT/CPM diagram for
every major project prior to their actual construction."

Section 6 of R.A 5979 requires the application of PERT/CPM technique to all projects with an estimated
cost of P100,000 or more.

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With the use of PERT/CPM, the project manager can easily obtain the following informations:

1. The graphical display of project activities

2. An estimate of how long will the project last

3. Determine which activities are the most critical to timely project completion.

4. Determine how long any activity can be delayed without lengthening the project.

4-3 Three Phases of PERT/CPM

1. Planning

2. Scheduling

3. Control-Monitor

Planning

Planning is defined as determining the relationship between the work operation and the sequence in
which they are to be performed.

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Each work operation can be performed in different ways at different costs and in different time
duration.

However, there is a danger that shortening a single operation may only increase project cost but may
not shortened construction time considering that other operations have not been shortened.

The specific information provided by the CPM are enumerated as follows:

1. PERT/CPM pinpoints the particular work operations

2. It provides a means of speeding up a project without excessive costs for overtime.

3. It gives a time leeway or float available for each of the non-critical work operations

4. It establishes time boundaries for operations

5. PERT/CPM indicates the earliest starting date for each work

6. It shows the most advantageous scheduling for all operations

7. It offers a means of assessing the effect on the overall project

8. PERT/CPM offers a means of re-scheduling the operations

9. Any claim if any, for additional payment will be understood both by the owner and the contractor.

10. In case of serious delay, the network can be revised at that stage
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In any project construction undertakings, planning is the most important consideration which includes:

1. Gathering of all the necessary input data to make the PERT/CPM work.

2. Planning phase is the main work of the

3. The contractor can seek assistance for the accomplishment of his work particularly the gathering of
data

4. The contractor has the complete perception, experiences, resources, and interest in getting the
project done

5. The planning stages give the contractor a "Dry Run"

6. If the contractor wants an effective approach and use of the construction management, he must do it
himself.

7. By performing the work personally, one obtains intimate first hand knowledge

SCHEDULING

Scheduling is defined as the process of translating the arrow diagram into timetable of calendar days.

The PERT/CPM schedule shows the relationships between the operations and the leeway limitations.

Job control through the use of PERT/CPM gives the management a reliable system identifying job
problems within days instead of months.

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The PERT/CPM diagram should be updated periodically to account for:

1. Time discrepancies

2. Deliveries
3. Weather

4. Change orders

5. Unexpected events or conditions.

CONTROLLING AND MONITORING

1. The contractor is supplied with time status reports

2. The contractor is provided with revised schedules

3. The contractor is supplied with cost status reports

4. The contractor should be supplied with those reports as frequently as desired

Life
Planning Phase

1. A network diagram defining the activities in the project.

2. The duration of activities

3. Cost estimates of the activities for monitoring cost, cash Bow requirements

4. Resource estimates

5. Trade indicators (responsibility) for activity grouping.

Schedule Phase

1. The schedule of activities

a. The Critical Activities

b. The Earliest Start date

c. The Earliest Finish date

d. The Latest Start date

d. The Latest Finish date

2. A Bar Chart or a Time Scaled Network

3. A Resource Analysis

4. A Cash Requirement

Kuya Say
The Control Monitor Phase uses actual data which includes:

1. Additions to the project

2. Deletion from the project

3. Changes as to duration, description, trade indicators, cost estimates or resource estimates.

4. Actual starting dates

5. Actual finishing dates.

The Output Phase consists of the following:

1. Time status report

2. Revised schedules

3. Revised Bar Charts/ Arrow Diagram or Network.

4. Revised resource analysis

5. Revised cash flow predictions

6. Cost status reports

There are three major reasons for construction failure:

1. Unbalanced organization

2. Lack of financial planning

3. Poor cost control.