METHOD STATEMENTS

The following discussion of method statements seeks to complement previ- ous discussions on construction programme schedules and cash flow dia- gram S-curves.*

Method statements can be categorised as follows:

• Prequalification submissions of techniques used to complete previous projects, which might be applicable to a current project proposal to assist with tender list inclusions, or tender review, which gives specific general statements or proposals to carry out the tasks at hand towards poten- tially saving the prospective client time and money.

• A detailed (contractor’s own) internal document that is not shared with external parties towards full description of the method statement of task realisation for assisting in the preparation of a tender-bid. • Alternatively, a method statement that specifically sets out to discuss

occupational health and safety considerations for a range of poten- tially dangerous and hazardous activities.

Generally, a method statement produced for internal use (to assist with tender-bids) is perhaps most worthy of note because it provides a fully detailed identification of the supply and installation of the elements and subelements of a project.

Method statement details depend on the information available to the main contractor at the time of preparation and will seek to identify methods for the main components of the work, scheduling of work (labour, plant and equip- ment), details of any subcontracted work, bulk quantities of materials required and any necessary temporary works, alongside environmental protection and safety measures, transport requirements and management of traffic on-site.

A range of stakeholders, including the prospective site manager, might be expected to be involved in determining construction methods that, coupled with a project schedule, enables the estimation of a relatively accurate proj- ect value and, not least, provides the means to monitor actual costs on-site to ensure that costs are kept within the tendered amounts. Anecdotally, on-site construction operations detailed within method statements are less likely to be followed by personnel on-site and, perhaps as a result, are less able to assist complex projects or those that have strict completion dead- lines to maintain cost and time predictions and planned parameters.

3.5.1 Method statements and risk

A first step in risk management is identification; one possible approach to this is to include an assessment of specific risks related to explicitly *Input from Colleen Smythe,17–39 _{received with thanks.}

itemised work tasks. After the identification of risk, mitigating measures might then be addressed directly within method statement breakdowns. Such a method might be argued to provide a more detailed and accurate reflection of the costs (both financial and time) to mitigate identified risk, rather than the somewhat more commonplace approach (often as a result of intense tender selection deadlines) to deal with risk in an arbitrary way by simply adding a contingency of 10% or so onto the overall project cost.

Such quantitative risk analysis, as direct risk mitigation measures placed directly with specific method statements, might come closer to estimating the project cost contingencies as accurately as possible for identifiable risks at particular times. Currently, linking method statement breakdown tasks specifically to a quantitative risk analysis is rare.

Qualitative risk analysis, if applied at all, is somewhat more of an aca- demic exercise that incorporates a range of (statistically based) methods such as simple assessment, probabilistic analysis, Monte Carlo stimulation, Latin hypercube sampling, sensitivity analysis and multiple estimating using risk analysis (MERA), outlined briefly as follows

• Simple assessment: A method for estimating risk by calculating the

expected effect of each significant risk and then adding the values together to give an estimate of the overall risk allowance required via a relatively simple mathematical technique best suited for small projects

• Probabilistic analysis: Applying (often subjective if historic cost spreads

are unavailable) probabilities to estimates, using a range of probabili- ties and associated values to determine an expected value applicable to a relatively small number of on-site risks

• Monte Carlo simulation: A (roulette wheel, computer software) prob-

abilistic analysis technique to address a large number of risk factors by simulating elements and combining them statistically to quantify project risks and provide risk parameters

• Latin hypercube sampling: Based on the Monte Carlo technique, takes

less time because it uses a systematic rather than random sampling

• Sensitivity analysis: Demonstrates the effect that risk has on a project

by varying the values of small key separate variables and measuring results to determine effect; albeit perhaps unrealistic because other variables are likely to be effected too

• Decision tree diagrams: Can evaluate alternative approaches to a

risky proposal

• MERA: A quantitative risk analysis method to find a risk estimate by

identifying and costing risk events associated with a project, which, rather subjective, may provide a meaningful estimate

3.5.2 Method statement continuity

Within both industry and individual companies, there is significant varia- tion amongst the variables included in method statements for actual proj- ects. Overall costs are a useful indicator of the effects of variations from predicted method statement values; however, contractors cannot determine the specific stage of the work breakdown structure task that contributed most to a cost overrun.

Contractors therefore might seek to track the costs at the different stages of the work breakdown structure utilising an ongoing S-curve. If records were kept in enough detail (as a progressive method statement continuity process) then this may determine where most cost overruns occur. Such information may then be presented in a diagram superimposing both sched- ule and cash flow; this combined diagram, prepared for a wharf berthing dolphin construction (Figure 3.18) is shown as follows:

Method statements itemise the labour, plant and material input(s) required for particular work tasks. Once allocated at the early planning stage, stakeholders might perhaps seek to reflect on whether the methods and materials chosen represent a best distribution of all available resources. Section 3.6 structures such a reflection and describes specific ways to con- duct a value management exercise to assess opportunities for potentially improved resource utilisation.

Asbuilt construction schedule - last winged dolphin constructed WBS step Task Duration_(days)

1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6

Pour pile plugs Install precast Pour in situ concrete Install fender Curing Strip formwork 1 4 15 1 7 1 $ 200,000 150,000 100,000 50,000 0 Cumulative income Cumulative expenditure 0 1 2 3 4 5 6 7 8 9 Weeks Weeks