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Egypt Engineering Consultant Mechanical study materials
Egypt Engineering Consultant Mechanical study resources

Egypt Engineering Consultant Mechanical: Project Management, Contracts and Cost Estimation

Egypt Engineering Consultant Mechanical · Work through your exam, one topic at a time.

All guide sections

Project Management, Contracts and Cost Estimation

What the exam tests

This domain tests cost planning, BOQ measurement, contract forms, variations, claims, delay analysis, payment and earned-value control. Egyptian public procurement law and FIDIC-based contracts are common reference points.

Core rules

  • Contract types: lump sum suits defined scope; remeasurement suits uncertain quantities; cost-plus suits fast-track work. Choose by risk allocation, not habit.
  • A BOQ must state measurement rules, units, rates and inclusion. Omissions and duplicated items are common sources of claims.
  • Variations require instruction, valuation and programme impact. Verbal instructions should be confirmed in writing.
  • Retention, performance security, advance payment and liquidated damages are contract mechanisms, not penalties to be improvised.
  • Earned value: CV = EV − AC; SV = EV − PV; CPI = EV / AC; SPI = EV / PV. Forecast cost at completion is BAC / CPI when the current trend continues.
  • Delay analysis should separate employer risk, contractor risk and neutral events. Contemporaneous records decide claims.
  • Contingency belongs to identified risk; escalation is a separate allowance.

Worked example

A package has PV = 1,200,000, EV = 1,000,000 and AC = 1,100,000. CV = 1,000,000 − 1,100,000 = −100,000, so it is over budget. SV = 1,000,000 − 1,200,000 = −200,000, so it is behind schedule. CPI = 0.909 and SPI = 0.833. If BAC is 1,200,000, forecast EAC = 1,200,000 / 0.909 = 1,320,000. The project is both late and overspending.

Traps

Reversing CV and SV signs; using billed value instead of earned value; forgetting that EAC depends on the assumption used; omitting escalation and currency effects; accepting a variation without a written instruction; calculating retention on the gross amount when the contract says otherwise.

Key points

  • CV = EV − AC and SV = EV − PV; negative means adverse.
  • CPI = EV / AC and SPI = EV / PV.
  • EAC = BAC / CPI only when the current cost trend continues.
  • Variations need instruction, valuation and programme impact.
  • Contemporaneous records are essential for delay claims.