answer part B please

Cost overruns

A. Three months into a lump sum project, this project manager has realized that his

company is overrunning costs on half of the direct work activities. They are

under-running on the other half. The bottom line looks okay, maybe even on the plus

side. Is this possible? Can he do anything about the codes that are overrunning? Since

the bottom line looks okay, should he even worry about it? This projects superintendent

does not want to report any single line item cost overruns to the home office, and asks

the PM to forecast the original estimate in each case so that the variances zero out. How

can the PM cover up this situation? What are the ramifications if he does what the

superintendent is asking? As long as the project makes the original fee, does it really

matter how individual cost codes turn out?

B. This is a similar situation to the above, except all of the codes appear to be overrunningtheir estimates. The project looks like it is going in the tank to a tune of approximately $500,000.

What are some of the reasons this overrun could be occurring?

Should the project manager and the superintendent just hold on and ride it out? What are some potential resolutions you could recommend to the jobsite team?

Should they ask for assistance from the home office?

Should they start looking for a new employer?