2006

G

guidelines
construction management good practice

Ground floor, Milner Place 32 Princess of Wales Terrace Parktown, Johannesburg Postnet Suite 240 Private Bag X30500 Houghton, 2041 Tel. (011) 274-6200 Fax. (011) 642-2808 www.shf.org.za

G U I D E L I N E S CONSTRUCTION MANAGEMENT

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Foreword
When a social housing institution, co-operative or private property developer has to decide on an approach for the delivery of housing, it must ask itself which strategy fits best, given its own and the client’s developmental objectives and constraints. One can deliver housing through any of the following scenarios:

• Acting as building “client” or developer, but outsourcing the development
function on a design-and-build (“turn-key”) package basis to a professional external developer

• Acting as developer, retaining overall management of the development
function in-house, employing professionals for design and supervision, and using a main contractor for the actual construction work (“design by employer” method)

• Acting as “main contractor”, employing sub-contractors and/or
community-based labour to carry out the actual construction work; responsible for supervising and controlling the construction process and activities, including all the required resources The final choice of the approach will be determined by factors such as:

• The internal skills available and capacity to manage the respective options • The extent and cost of external expertise available to assist in managing
the various options

• Developmental objectives (often in conjunction with sponsor and other
stakeholder requirements) such as local economic empowerment and availability of local skills

• The risk “appetite” of the social housing institution, co-operative or
private property developer These guidelines focus on the scenario where a social housing institution, co-operative, private property developer or contractor acts as a “main contractor”, taking on all the attendant risks and responsibilities that normally accompany the main contracting function. A main contractor plans, organises, co-ordinates, controls and leads activities on site during

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the actual construction process, including the management of resources, from the date of taking possession of the site until the final handover of completed units to the client. The guidelines take into account the decisions and actions that need to be taken during the construction planning and implementation phase, as these have an impact on the effectiveness of the hand-over of stock to the client, as well as the future management and maintenance of stock. The Social Housing Foundation is confident that this guide will be widely used and will assist the development and growth of those social housing institutions, co-operatives, private property developers and contractors acting as “main contractors”.

Brian Moholo
Managing Director, Social Housing Foundation

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Note:

The topics of property development and property management are covered by extensive existing literature and guidelines developed by others. For the convenience of users of this manual, brief introductory notes on important general aspects of the property development and construction processes are given, but these should be used in conjunction with the more comprehensive existing materials contained in other publications such as:

• The SHF’s Social Housing Institutions Operations Manual (together
with accompanying training materials)

• SHF Best Practice Booklets • Manuals and guidelines produced under the Support Programme
for Social Housing’s Capacity-Building Programme

• Manuals and guidelines produced by NASHO

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Acknowledgements
The authors gratefully acknowledge the contribution to this volume by others. Parts of the text are based on consultation with, or have been borrowed from the work of, the following people and organisations:

• The Social Housing Foundation (SHF) • The Support Programme for Social Housing (SPSH) • The Construction Industry Development Board (CIDB) • The Urban Sector Network (USN) and its affiliates, in particular Planact and the
Development Action Group (DAG), and Afesis-corplan

• CSIR BOUTEK • The Department of Construction Economics at the University of Pretoria • Social Housing Institutions across the country, especially the eMalahleni Housing
Institution

• The Masisizane Women’s Co-operative, and Andrew Moore of Rooftops
Canada

• The General Motors SA Foundation (previously Delta Foundation)
The authors nevertheless take full responsibility for any errors that may remain.

Social Housing Foundation Postnet Suite 240 Private Bag X30500 Houghton, 2041 Tel: +27 (11) 274-6200 Fax: +27 (11) 642-2808 www.shf.org.za
Edited by Wordsmiths Design and Layout by MANIK Design Studio
DISCLAIMER
Great care has been taken in the preparation of this document, and the information contained herein has been derived from sources believed to be accurate and reliable. The Social Housing Foundation does not assume responsibility for any error, omission or opinion expressed, or for as investment decisions based on this information. This publication was made possible through support provided by the Norwegian Embassy

Copyright © Social Housing Foundation 2006

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Contents
What you will find in these Guidelines Housing Project Development Phases – where do these Guidelines fit in?

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page
7

scope and purpose

housing project development phase
8

Why is good construction-management practice important? How should the entity behave when acting as a “main” contractor? The construction process

why?

9

how?

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the construction process

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11 11 11 14 15 19 20

What is construction? What are the main objectives of a construction project What does a main contractor do? Composition of a construction team Common risks that need to be managed by the main contractor Factors that determine success in construction How can the entity learn more about being a contractor?

Decisions that the entity acting as contractor should be involved in before construction
Choice of construction technology (structure and finishes)

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Planning for execution of work
Deciding on the implementation approach and the construction methodology Site establishment, temporary works and services, general management requirements (preliminaries) Preliminary cost estimates vs. detail cost estimates Estimating, cost estimating, rates, pricing and costing What is included in a main contracto’s price build-up? Building up rates and building price from first principles Estimating costs of material, labour and plant Planning and programming of the works

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26 34 36 36 37 39 39 58

Executing the work
Site layout and organisation Material supply and management Management of labour

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70 74 90

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page
Management of plant, tools and equipment Managing sub-contractors Required tests, inspections, approvals and certificates Health and safety Security Contract administration Construction cost management Cash-flow management (income and expenditure) Construction finance (operating or working capital) 92 94 101 105 107 107 110 113 114

Community-based construction
Reasons for community involvement in development projects Community-based construction – the “development team” approach

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116 116

Training
Training objectives Planning and preparing for training Who should be trained? Pre-construction training “Hard” building skills training

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121 121 121 122 123

The experiences of some entities acting as “main” contractors Wattville/Tamboville – low- to medium-density housing and community facilities project
Construction of the houses Organisation of the contruction Construction of the community facilities

experiences

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125 126 132

Masisizane Women’s Housing Co-operative, Midrand, Gauteng
Introduction Organisation of the contruction

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134 135

General Motors SA foundation – medium-density housing in the Eastern Cape
Missionvale Community Housing Initiative and Sakhasonke Village, Port Elizabeth

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138

Badiri House, Hillbrow (high-rise inner city refurbishment)

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What you will find in these Guidelines
The purpose of the guidelines is to assist users in employing good construction management practice in the construction of lowand medium-density housing projects.
This guide is intended for use in the pre-construction and construction phases of housing development, by any of the following parties:

• A social housing institution acting as a “main contractor” • A co-operative acting as a “main contractor” • A private property developer acting as a “main contractor” • A contractor acting as a “main contractor” • Service providers to any of the above (support organisations, technical advisors,
professional teams and subcontractors)

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Housing Project Development phases – where do these Guidelines fit in?
The housing project development process can be divided into the following broad phases: 1. Project initiation and validation phase - Conceiving the development idea or concept and initiating the project, including gaining control of a site that suits the idea 2. Pre-design feasibility or development appraisal phase - Preliminary studies are conducted to determine if the idea is viable, and whether to proceed 3. Pre-contract detail design development and technical documentation phase - Extending the appointment of professionals for further work stages, refining and finalising designs, conducting cost estimates and feasibility studies, preparing technical documentation, obtaining municipal approval to start building, initiating marketing (if applicable), and securing funding 4. Construction procurement or tender phase – Deciding on tender and contracting strategies and options, calling for proposals or tenders, adjudicating tenders, and awarding and signing construction contracts 5. Implementation or post-contract construction phase - Managing the actual construction process from site handover to the contractor(s) to taking on the completed units, and closing out the process financially and administratively

These guidelines deal with Phase 5 above, from the perspective of managing the physical process on site as a main contractor rather than managing it as part of the development function.

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Why is good construction management practice important?
Good construction management practice is essential in maintaining efficiency, costeffectiveness and control on projects. This, in turn, helps to maintain and protect projected profits, long-term financial viability, integrity, good reputation and good customer relations. Effective construction management, therefore, is an essential tool in ensuring the sustainability of the construction entity, together with marketing and adequate capitalisation. Other reasons for practising good construction management include the following:

• Ensuring the most efficient and effective use of scarce and costly resources such
as money, people’s time, materials and equipment in producing affordable housing to people with low income

• Maintaining high standards of quality and workmanship to ensure that
beneficiaries live in pleasant and well-functioning buildings; and managing entities enjoy low-maintenance requirements and expenses for the ultimate benefit of paying occupants

• Maintaining high standards of health and safety on building sites • Setting an example and being a role model for aspiring entrepreneurs and
development organisations in the community

• Building a reputation for dependable service (on time, within budget, and of
good quality) with clients, communities and funding agencies

• Building trust and good relations with suppliers, subcontractors, professionals,
and support organisations, which leads to smoother running of projects with fewer problems, delays and disputes

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How should the entity behave when acting as a “main contractor”?
Where an entity acts as developer only, it will normally employ professional consultants and a main contractor to do the design and construction work respectively. In this case, design risk and accountability rest with the design team, while construction risk lies with the main contractor. Acting as both developer and main contractor often places an entity in a position in which it is important to draw a clear line between the two responsibilities, and to organise its operational structure or project in such a way that accountability resides where it appropriately belongs. This could mean, for instance, that the external design team reports to those members or employees within the entity that are responsible for managing the development process, and that construction-related activities and resources (subcontractors, suppliers and labour) are managed by other members or employees of the entity responsible for managing the construction process. Establishing and maintaining differentiated functions and accountabilities becomes difficult where some or all of the same people from the organisation are involved in both functions (as is often the case). It is advisable to draw up function charts and organograms before starting a building project, so that staff who fulfil dual or multiple roles can clearly differentiate between the actions required for management of the development process on the one hand, and management of the construction process, on the other. Acting as a main contractor only requires an entity to focus on the management of construction process. This also requires an operational structure to be in place, in order to clarify the roles and responsibilities of each of the members or employees.

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The construction process
What is construction?
Construction can be seen as the conversion of “raw” resource inputs into defined functioning outputs, by means of a managed process. More specifically, construction is the use by a contractor of supervised labour, and appropriate plant, equipment and other constructional aids, to process and assemble materials and components on site (sometimes partly off site), according to design and specifications, into a completed functioning building.

What are the main objectives of a construction project?
The main objectives of each construction project (based on the principles of project management) are to erect the building or facility in accordance with the design and specifications, with the most effective use of resources and control of risk, and to complete it:

• within the budget (allowable cost) • on time (within the specified and agreed contract period or legitimate extensions
thereof)

• to an acceptable and agreed standard of quality and workmanship
The above are the “technical” objectives of a project. There are usually other “softer” objectives as well, such as achieving buy-in through participation, capacity building, skills transfer, and promoting job creation and local economic development.

What does a main contractor do?
Acting as the main contractor on a building project involves the following:

• Interpreting the project drawings, specifications, tender and contract documents,
in order to fully understand the project requirements, risks, and legal and physical conditions under which it will have to be carried out

• Using the above interpretation to:
• estimate the likely cost (for tendering, budgeting and cost-control purposes) • determine and allocate resources to the different phases of the work • plan a functional site layout (placing of material stockpiles, storage, administration and service facilities, securing entrances and ensuring efficient movement of vehicles) • plan and schedule the execution of the work, establish quality control measures, and determine own working capital and cash-flow requirements for the work to be done

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• Deciding, as part of work planning and resource allocation, what work to
do in-house with own core personnel, and what work to outsource to subcontractors

• Calling for quotes and tenders from suppliers, sub-contractors and plant-hire
companies

• Negotiating prices and contracts with these service providers • Where required, obtaining completion guarantees in favour of the employer
or client

• Organising and paying the premiums for all the necessary insurances on a
building project

• Ensuring compliance with industrial health and safety regulations and requirements
on site, at workshops and on other premises, including providing safety clothing to workers and visitors; and making sure plant, equipment, temporary works and installations are regularly inspected and serviced

• Drawing up and executing environmental site management plan, where
required

• Ensuring compliance with employment legislation and procedures, paying workers
fairly and on time, and generally managing labour relations in the work place

• Submitting all required statutory returns (taxes, UIF, local authority levies) • Taking custody of, and protecting for the duration of the contract all benchmarks,
datum levels and boundary pegs pointed out by the employer or principal agent at the beginning of the contract

• Arranging all temporary service connections required for effective execution of
the work, for example, electricity, water, and sewerage

• Fencing the site and arrange necessary security • Providing (hired or owned) all temporary site facilities, such as storage huts,
worker ablutions, a site office, plant such as mixers or batching plants, and tower cranes where required, including transporting to site, erecting, maintaining, dismantling and removing on completion

• Calling for inspections by municipal building inspectors, project engineers,
NHBRC or bank inspectors, of work such as foundation trenches, reinforcing steel, and sewer lines before covering them up

• Arranging for all required tests, for example, making and submitting to a laboratory
concrete crushing strength cubes, and supplying the results to the engineer to prove compliance with specifications

• Arranging for on-site re-measurement of all provisionally measured work before
covering it up, to ensure reimbursement of actual expenses incurred

• Planning and programming the execution of the work on a daily, weekly, monthly
and overall contract-period basis

• Planning and co-ordinating ordering, delivery, receipt, storage, security,
protection, and safe handling of materials

• Co-ordinating the work of different sub-contractors (and managing any conflict
between them)

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• Calculating and submitting claims for interim progress payments from the
employer and/or funders for own work completed, and ensuring sub-contractors do the same

• Practising continuous internal costing and cost control • Keeping a site book for instructions, as well as a drawing-receipt register to
ensure that work is being carried out in accordance with the latest drawings and/or instructions

• Assisting with pricing variations and site instructions with cost implications • Keeping a site diary and other records (covering rainfall, incidents, number and
categories of personnel, plant and equipment on site)

• Submitting well-motivated claims for extras and requests for extension of the
contract period

• Hosting site meetings • Cleaning and protecting all completed or partly completed work, removing rubble
regularly, and maintaining a clean, neat and safe building site

• Generally maintaining efficient administration of the contract, both on and off site • Managing risks related to the construction process

Costruction Management Triangle

Quality

Cost

Time

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Composition of a construction team
The diagram shows the composition of a typical construction team that needs to be managed by the main contractor (some of the team members are employed directly by the main contractor).
Approved plans Permanent service connections Loan agreement

Local authority
Temporary Service connections Subsidy agreement

Employer

Professional services

Draws paid via employee

Building contract

Inspecti

ons

ta s co to agen (no nt t co rol ntr ac t)

Funder (s)

Professional team

Ac

Orders Payments

Head office

in Adm por t p su
Ad sup min por t

Managers

Site

Supply

Materials suppliers

Su

pp

ly

Site establishment

Plant-hire companies
provides

Site admin and management
pr ov ide s

Community

pay wages

prov

Recruit, supervise,

Labour

ides

Contract, co-ordinate supply materials, pay for work done

Labour-only sub-contractors

Contract, co-ordinate, pay for work done

Supply & fit sub-contractors

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provides

Project

Pay overheads

Main contractor

Participates in planning

G U I D E L I N E S CONSTRUCTION MANAGEMENT

Common risks that need to be managed by the main contractor
The main contractor should at all times be aware of all the risks involved. Below is a summary of the most common risks that face main contractors in the execution of construction contracts. This summary serves as a checklist for the construction manager, to make sure the most common risks are being taken into account, both during the planning and the execution phase.

Risk! Under-performance of in-house staff with regard to:
• Management of the process, especially controls and monitoring • Acquiring necessary competencies and skills How to counter: • Putting in place clear HR and personnel-management policies and procedures • Selecting competent staff • Providing training and support (identifying real training needs is very important here) • Monitoring progress, conducting appraisals and providing counselling where
appropriate

• Having good contracts with performance clauses • Using a “stick” and “carrot” system (sanction and incentives) • Taking care with succession-planning

Risk! Under-performance or non-performance of worker teams and sub-contractors with regard to:
• Completion of the works • Sub-standard quality of workmanship and materials supplied • Delays and late completion How to counter:
Non-completion of the works:

• Obtain, where possible, performance guarantees from sub-contractors issued
by a bank or insurance company. This usually involves the main contractor providing back-to-back payment guarantees to the sub-contractor. With small and emerging sub-contractors this will, however, in many cases not be possible, and the contractor will have to rely on proper selection, regular and fair payment, and hands-on management to ensure sub-contractors perform Sub-standard quality of workmanship:

• Evaluation and selection of sub-contractors with known reputation for good
work (check references – do physical checks of work rather than just telephonic confirmations)

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• Provide training and mentoring • Provide good supervision • Provide clear documentation (drawings, specifications, site instructions) • Provide samples. At the beginning of the contract, for instance, bricklayers must
build small sample face-brick walls somewhere on site displaying an acceptable and agreed standard. These samples can then be used as references for all permanent face-brick work. This will prevent arguments down the line about what constitutes an acceptable standard

• Do not pay for defective work until it has been rectified. Remember that retention
is a reserve for fixing possible latent defects, and not for covering the cost of visible patent (current) defective work Delays and late completion:

• • • • •

Perform evaluation and selection as before Levy penalties for late completion Insist on realistic and detailed programmes of work Monitor progress regularly Order materials timeously and ensure work is not delayed because of materials shortages on site roofs are up before plastering walls. If the roof is delayed, however, it may be necessary to plaster in the meantime, to keep to the programme, as long as the plaster is then protected against drying too quickly (causing cracks) by spraying it with water or covering it with plastic sheeting

• Re-schedule work when necessary. For example, it is good practice to wait until

Risk!
• • • • •

Under-performance of suppliers with regard to:

Late delivery of materials Unavailability of materials Quality of materials Price fluctuations Short deliveries

How to counter: • Choose reliable suppliers • Ensure timeous ordering of materials • Have formal ordering procedures (negotiate, quote, written order, check
deliveries and delivery notes) with a proper follow-up system

• • • •

Negotiate, as far as possible, fixed prices for the duration of the project Get bricks delivered in pallets rather than tipped Specify standard materials of known quality where possible Always try to obtain physical samples of materials and check their quality before ordering

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Risk! Damage to and/or loss of materials and equipment through:
• • • • •
Robbery Pilfering and fraud Negligence Neglect (no proper storage, lack of maintenance) Incompetence or lack of training in proper use and handling

How to counter:
Theft on site:

• • • •

Take out insurance Provide safe storage Maintain site security Have proper control systems and procedures for receipt, issuing and checking on the usage and wastage of materials on site of the works can be locked securely)

• Do not bring valuable materials to site or instal them too early (before that section
Waste and breakage:

• • • •

Training and supervision of staff to ensure careful and responsible handling Monitor consumption against allowances Issue just enough for specific tasks to site teams at a time Reduce handling to a minimum by judicious placing of stores facilities and planning of the work

Responsibility for materials:

• On site: Make sub-contractors responsible and accountable • Off site: Inspect, obtain cessions of ownership and proof of insurance (preferably
do not pay for materials off site)

Risk! Unavailability of working capital at the right time (cash-flow problems) due to:
• Delays in subsidy and loan draw-downs • Poor cash-flow management • Unexpected expenses not provided for in contingency allowances • Problems with overdraft and credit facilities How to counter: • Build up and keep some cash reserves • Secure overdraft facilities while things are going well, not when you are already
in crisis

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• Comply with funder requirements: Plan work so that achieving payment
milestones, if any, coincides with your cash requirements (dates for paying wages, supplier accounts, etc); call for inspections timeously; ensure procedures are followed and that paper work is one correctly

• Push for payment – it is usually necessary to follow-up on processing of payments
personally, and to put pressure on the people doing the processing

• Monitor cash-flow requirements continuously, and make arrangements for
obtaining payments or credit facilities in good time

Risk!

Industrial action and other disputes:

How to counter: • Ensure compliance with legislation and agreements • Foster good human relations • Put in place fair practices and clear employment criteria General risks: • Inexperience of workers • Inadequate security on site • Vandalism • Dealing with latent defects • Bad weather • Breakdown of co-ordination between trades (and resulting disputes) • Underestimation of resources, cost and time required for the work • Disputes around materials lost through excessive wastage, theft, damage, wrong
setting out of works, and replacement of defective work

• Working with large amounts of cash on site and in transit (wages) – this is to be
avoided as far as possible by opening bank accounts for all service providers and paying via electronic funds transfers (EFTs)

• Conflict among sub-contractors or in the community regarding who should get
the work and be part of the construction team

• Interference by local politicians (or would-be politicians) and other vested
interests and powers

How to counter:
Most of the above are dealt with in these Guidelines. Some specific advice is as follows: Latent defects:

• • • • •

Put in place a retention/construction guarantee Get NHBRC registration where applicable Make sure there is adequate supervision Insist on proper specifications and designs Be aware of the law and your legal rights

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Bad weather:

• In your schedule, allow for work stoppages caused by the kind of weather
conditions to be expected in accordance with the season

• Plan a construction sequence to ensure, for instance, that roofs are up as soon
as possible for phases completed during the rainy season

• Protection – ensure, for instance, that storm water will not flood foundation trenches
or other parts where work must proceed in order to stay on programme Inadequate co-ordination of trades:

• Ensure planning, organisation and monitoring • Clear delineate areas of responsibility in contracts and works descriptions • Provide complete drawings for each trade

Factors that determine success in construction
Success in construction depends on:

• The organising and leadership ability of those in charge (project manager,
construction manager, site agent)

• The planning and allocation of adequate resources at the right times • The accuracy and timely availability of professional documentation and
guidance

• Field experience • Planning • Realistic programming of the work, regular monitoring of progress, and corrective
action (including re-programming, additional resource allocation, etc.) when deviation occurs

• Timely ordering of materials and labour • Ability to motivate the trades
• Effective co-ordination of trades • Insistence on quality • Maintaining good labour relations • Coping with unforeseeable factors (for example, inclement weather, shortage of materials) • Meeting critical deadlines • Satisfying the local authority inspectors and the NHBRC • Support of the developer/employer and the professional team

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How can the entity learn more about being a contractor?
Simplistically, construction appears to be a matter of putting materials and components together according to a drawing, with a team of workers, tools and equipment. Proper construction, however, requires a combination of management skill (planning, organising, co-ordination, leadership and control), knowledge, and experience in the fields of technology, finance, law, commerce and human relations. Construction should not be underestimated because of unregulated entry into the construction market. This document provides starter guidelines only. If the entity is involved in large-scale and continuous construction as a contractor, it should send staff members on training courses offered by private colleges, universities and technical universities/technikons, and other organisations in the industry; subscribe to technical journals (check with Brooke Patrick Publications for available titles); and acquire some good books on the subject. Authors who deal with building construction as well as management aspects, include: Calvert, Chudley, Davis, Langdon and Everest, Everett, MacKay, Nunnally, Seeley, Harris and McCaffer, the Mitchell’s Building Construction series, Spence Geddes, Willis, and a very readable series of publications by the British Aqua Group. Locally, the CSIR’s BOUTEK division and its predecessor, the National Building Research Institute (NBRI), published over the years many useful papers and booklets with good practice guides. Most university libraries keep copies of these, or you can order them from the CSIR direct. The International Labour Organisation (ILO), with support from Ntsika Enterprise Promotion Agency, the Black Construction Council, and the Department of Public Works, also developed a series of manuals for the Contracting Entrepreneurial Training Programme (CET), and it may still be possible to obtain copies from one of the promoters. The Concrete Masonry Association (CMA) based in Midrand, Gauteng, produces handy booklets on how to build simple structures, and on the use of concrete masonry building units (bricks and blocks). The Clay Brick Association does the same for the use of its member’s products. Building-materials supplier, Cashbuild, and the Urban Foundation published a booklet called Home Builder’s Handbook. Many materials manufacturers (of roof sheeting and tiles, cement, paint, ceramic tiling and other materials) provide technical brochures to assist in the proper measurement and use of their materials. These are often obtainable from the larger building supply stores. It may also be worthwhile (for a fee) to subscribe to a good product catalogue library such as Archi-text.

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d

Decisions that the entity acting as contractor should be involved in before construction
Choice of construction technology (structure and finishes)
Introduction
Although design and specification is normally the domain of architects and engineers, contractors can play a useful part in giving practical advice. Where the entity acts as contractor, it is imperative that they are actively involved in design and specification decisions from the start, in order to ensure:

• Cost-effective construction and an affordable end-product • Low-maintenance facilities • Socio-economic and empowerment objectives are promoted through the choice
of construction technologies to be employed, for example, labour-based rather than plant-based construction It is always a challenge for an institution developing any form of social housing to balance its primary objective of providing quality affordable accommodation, with the secondary objectives of job creation, empowerment and local economic development. Each institution must examine its priorities and set its own criteria in this regard, and the contractor can guide the decision-making parties on how to achieve their objectives, by distinguishing between labour-based, labour-intensive and community-based construction. The contractor should also share its experience with regard to technology required in various designs and specifications, and the practicality of the proposed technology to be used. Various products (with different specifications) are available on the market. The contractor should be open to sharing information with regard to the quality of the product or the practicalities pertaining to the applications of such specifications.

Labour-based, labour-intensive and community-based construction
Labour-based construction is different to labour-intensive construction.

• Labour-intensive construction implies the use of as much labour as possible. In
practice, it is usually implemented by substituting people for machines

• Labour-based construction, however, aims at changing the technology employed
in the construction methods, thereby providing employment and training opportunities for both unskilled and semi-skilled labour. The labour-based approach to both the design and construction of engineering services enables the unskilled worker to instal the complete service with minimal reliance on

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plant. The emphasis in labour-based construction is on employment, training and development, while ensuring that cost and quality compare with those of plant-based construction. Construction plant and hi-tech tools are used only where appropriate

• Labour-based construction benefits a community by creating employment and
facilitating the acquisition of technical skills. If, however, the community also participates in the administration and management of the project, the activity becomes community-based

• Community-based construction in a sensitive and non-imposing manner aims at
the use of labour-based projects to promote the emergence of local entrepreneurs who, with adequate technical, commercial and financial support and instruction, could in due course, become fully fledged contractors

Technical considerations
Foundations
Conventional strip footings under walls, and reinforced pads or bases under columns in framed structures can be labour-intensive (excavations and concreting by hand, with or without the aid of mechanical excavators and concrete mixers). Engineers often specify integrated floor and foundation raft systems for stand-alone houses, especially because of their effective performance in poor soil conditions and the speed at which they can be built. Specialised mechanical excavators are normally used for the narrow ribs or beams in the ground. These could also be dug by hand, but this is not very practical. Some foundation raft companies have initiatives where they rent out equipment and provide training and assistance to local teams or emerging sub-contractors to construct the rafts.

Walls
Conventional brick or block walling is labour-based (even more so if the bricks or blocks are manufactured on site), and the most familiar method to bricklayers. Singleskin block walls, although quick to erect and the cheapest option, are problematic with regard to water penetration. The structural integrity of the walls can also be compromised if the blocks are not built with properly filled beds and joints. Fixing of window and door frames and roof anchors, especially if not detailed correctly, can also be problematic. There are countless patented walling “systems” on the market, from so-called “drystacking” blocks (interlocking blocks with no mortar beds and joints required) to complete composite wall panels pre-fabricated on site or in a factory off site. Competent technical advice (and “market” feedback) should be obtained before purchasing any system or product. Beware of products without Agrément or MANTAG or NHBRC approval. However, even with such approval, discuss with an architect and/or engineer the suitability of such product for your purposes, and check its acceptability to the end-user public.

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Wall finishes
Internal wall finishes should provide good cover (plaster basis with paint) and the paint should be washable (although this is more expensive) in order to reduce the maintenance requirement of the house or unit once occupied. External finishes, within the bounds of affordability, should provide adequate resistance to water penetration, should be durable and should have low maintenance requirements. Wall finishes should provide attractive facades. Face brick is ideal from a maintenance point of view, and is not much more expensive than a good plaster-and-paint finish. When used in double-skin construction, and if bought from a reputable manufacturer, face bricks offer adequate resistance to moisture absorption. Face bricks vary widely in cost and quality, and should be carefully selected and incorporated into designs that make aesthetically acceptable use of them – remember this cannot be changed later, as with paint colours. It is also more difficult to repair damage (matching later batches of bricks, and colour of mortar in joints), and to clean face-brick walls defaced by graffiti. Plaster and paint may offer more variety and scope for re-decoration, but periodic re-painting will be required. This could become quite expensive in taller buildings because of the need for scaffolding. If this option is selected, use good quality externalpaint, preferably thicker-textured or elastic types of coatings that will cover minor cracks. Usual practice is to re-paint every five or six years.

Plaster and paint

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Some experts recommend, however, that the first re-painting be done within 3 years of completion. This “consolidates” the painted surface after the initial reactions with oxygen, solar radiation and moisture, both inside the structure and in the atmosphere, and makes it possible to stretch subsequent re-paintings to longer intervals, say up to seven or even nine years. Cement-based paints with mixed-in pigments such as “Cemwash” or “Earthcote” provide attractive and durable options, and some suppliers provide equipment and training on site, so the finishes can be applied by local labour. Certain patented wall coatings claim to last the life of the building (“Marmoran”, “Gamma-Zenith”), but these are expensive, and if there is movement or moisture in the underlying structure, there could be expensive-to-fix problems such as discolouration, cracks and spalling.

Structural floors (slabs) in multi-storey buildings
There are two basic types of slabs: a solid in-situ concrete slab and a composite slab. The composite slab consists of a pre-fabricated component placed to span from support to support. This is covered with an in-situ concrete topping and is used for simple rectangular single-span structures. The composite slab is often the quickest and most cost-effective solution, provided there is access for a mobile crane for off-loading and placing the heavy pre-cast beams or “planks”. Another type of composite slab makes use of concrete hollow blocks packed in narrowly spaced parallel rows on a flat steel deck, and covered in in-situ concrete to form a ribbed structure. The blocks are light enough to be handled manually, and therefore provide employment. For shapes that are more irregular, and smaller slabs, it is more practical to cast an in-situ solid slab. Building solid slabs is also a more labour-intensive method. Always get quotes for both options and discuss the options with your engineer before deciding on the type of slab.

Roof structures
Conventional trusses can be made on site in a jig (which provides employment), but this can be time-consuming, because production is limited by the number of carpenters, jigs and amount of space available. Truss components are first nailed together, and then bolted tight once erected. This can time-consuming and labourintensive. This method also requires more cutting on site and increases the amount of material wastage. The other option is to buy engineered trusses from a specialist who provides the design, supply and, if required, erection as well. These trusses are of better quality, and are lighter than those made on site. Lightweight galvanised steel truss systems can also be considered, pending the effectiveness in certain applications.

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Roof covering
You will need to choose between concrete and clay tiles, or long-length profiled metal and fibre cement sheeting. The user public seems to prefer tiles, although pre-painted corrugated sheeting appears to have made a comeback. Tiles require steeper pitches (meaning more brickwork in gables), and more support in the form of trusses and battens spaced closer together. Profiled sheeting can be put on flatter pitches, and can span longer distances without support. On the other hand, they require more edge treatment (fascias and bargeboards) to appear acceptable, can make rooms very hot if there is not an insulated ceiling underneath, and could be prone to leaks if the pitch is too flat, or if there is poor workmanship during installation. Maintenance-wise, there is little difference between different roofs under normal circumstances. In areas with high winds, tiles may be damaged from time to time, and in corrosive industrial or coastal atmospheres, metal sheeting is prone to rusting, even if it is pre-painted.

Flooring
Carpeting and vinyl flooring wear out and are easily damaged by occupants. They will have to be patched and replaced several times during the lifetime of a building. Ceramic tiling is more durable, but also costs more. Life-cycle cost comparisons should be made, where the estimated escalated costs of each option over the lifetime of a building or occupancy period (initial, periodic replacement, cleaning and maintenance) are discounted to a present value and compared. (If you do not know how to do this, ask a quantity surveyor to help.)

Windows
Steel window frames are most commonly used because they are strong, durable, come in many standard sizes and shapes for every application, and are readily available at competitive prices. With a bit of preparation and training, they can also be manufactured on site or in the local community. They do, however, require good protection against rust by periodic re-painting, which is a tedious and costly exercise. Wooden windows, although fashionable and attractive, are expensive, easily damaged during construction, and require regular and expensive treatment against ultra-violet light (the sun) and moisture penetration. Aluminium and PVC windows are attractive and durable, with virtually no maintenance requirements, but they are expensive.

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p

Planning for execution of work
Deciding on the implementation approach and the construction methodology
Introduction
Construction of single-storey buildings is usually quite simple. Acting as contractor on these projects requires fewer resources and less skilled labour. Unless the site is geologically suspect, only rudimentary structural design of foundation may be required, providing the roof construction is properly certified in terms of legislation pertaining to roof design, erection and inspection (notably for prefabricated timber trusses). Construction of multi-storey buildings significantly increases the complexity of operations. It requires more resources (plant, constructional aids such as scaffolding and form-work, and vertical transportation equipment such as hoists and cranes). Higher levels of skills from the contractor and sub-contractors are also required. Programming the sequence of work is more complex. Allowance must be made for propping and back-propping of slabs, which prevents the commencement of certain building work immediately after the casting of slabs. Final finishing is done from the top floors down, to avoid damaging or dirtying completed work on the lower floors.

Who does what?
The entity acting as developer will assemble all the pre-construction parts of the project, such as determining the nature and scope of the project, securing land and funding, carrying out the social survey and market assessment, and initiating the marketing itself. It may then engage contractors on either a “design and build package”, or the “design by employer” method, where the professional team works for the entity, and a main contractor carries out the actual construction work without any responsibility for design. In a situation where the entity acts as “main contractor”, however, as is dealt with by these Guidelines, there are many issues to consider in addition to the normal development functions. Before construction starts, the entity as contractor will have to carefully study the drawings, specifications and bills of quantities; consider site location and conditions in order to work out the approach to implementation; and draw up lists of work to be done and resources that will be needed for each phase (labour and skills requirements, plant and equipment and constructional aids needed). Aspects to be decided on include the following:

Which approach to physical implementation is best suited to the type and size of project? Should we use sub-contractors rather than directly employed labour, or is there a need to employ local labour/community-based construction teams directly for the main part of the work such as brickwork, plastering, roofs, other carpentry work and tiling, only using sub-contractors for specialist work such as plumbing and electrical work and perhaps glazing?

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Guideline:
If the entity acts as contractor only occasionally, for instance tackling one project at a time as the opportunity for new stock-development arises, it is best not to employ full-time staff, but to do all the work with sub-contractors, managed by a professional construction manager under contract. Clear allocation of responsibilities, careful co-ordination between different trades, good communication, and good monitoring and reporting systems and procedures are very important. If the entity is going to build continuously for a long time, for example under an extended stock-development programme, it may be prudent to employ a small full-time core team of skilled people and general workers who can do basic work that sometimes falls into the gaps between different types of sub-contract work. Examples would be excavating and concreting foundations before the brick-laying subcontractors arrive. Instead of a full-time team, the entity could also train and employ community-based labour teams to perform this kind of work, from the areas in which projects are carried out.

How will we manage the construction work? Should we employ our own full-time in-house contract manager and clerk of works; should we engage the services of a professional construction manager; or should we extend the brief of the normal professional team to include organising, co-ordination and supervision of the various labour teams and/or sub-contractors on site, while we, as main contractor, provide plant, materials and working capital?

Guideline:
In the early stages of its existence, the internal priorities of an entity are to have a competent CEO and financial officer or manager in place, with some support staff. The number and size of construction projects determines whether a full-time in-house construction manager is necessary. For projects of up to 200 units, the cost of a full-time inhouse construction manager or project manager is not justified, and the CEO or operations manager will take responsibility for managing the construction process, with outside help from stakeholders such as provinces, the SHF, the NHFC and others. Although the entity can make do in this way for a while, the CEO’s attention tends to shift to dealing full-time with strategic management and internal office administration. As the number of construction projects (and units under construction) grows, it becomes imperative to appoint a full-time construction or project manager who will be responsible for the management of one or more projects simultaneously. In this case, it may also become necessary to appoint site agents (who are responsible for hands-on management of construction work, and are based on site) who report to the project manager or construction manager. It is usually more costeffective to appoint such a person on a fixed-term contract basis.

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Should we opt for labour-intensive/labour-based construction as described earlier (possibly resulting in a longer construction period and some quality issues), or a more mechanised approach with greater use of plant (which is more cost- and time-efficient, and results in better quality of certain elements)?

Guideline:
The entity should aim for maximum employment without sacrificing production, quality and affordability. For example: compaction of filling under floors can be done by hand (if the areas are relatively small), however, it would be more economical and appropriate to compact larger areas such as parking areas with small petrol-driven compactors, which also make the level of quality of compaction much easier to achieve.

Plate-compactor for compaction of large areas

Bomag roller for compaction of large areas

Wacker for compaction of small areas and narrow widths

What is the most effective horizontal transportation method on site for different sites and different types of materials – wheelbarrows, dumper trucks?

Guideline:
Moving materials around by wheelbarrow is labour-intensive and works well on smaller sites. For larger sites, it slows down production, and increases the labour requirement beyond cost-effectiveness. It may be better to hire a dumper truck or two for bulk carting of materials from stockpiles to the area of work, and to use wheelbarrows only for the short distances to the final position. A very useful piece of plant to have on larger sites is a tractor loader backhoe (TLB), which is a modified tractor with a hydraulically operated front loader scoop and a rear excavating bucket. Its intended function (for which it is very versatile and cost-effective) is to excavate long trenches and holes for manholes, and to load excavated material and rubble onto trucks for carting away. However, many site agents use it as a generalpurpose carrier for moving cement, aggregates, mixed concrete and mortar, window frames and even workers in the front loader scoop. The machine is not designed for this purpose and its load-carrying capacity is too small to justify its running costs when used in this way.

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Wheelbarrows for horizontal transportation

Dumper truck for horizontal transportation

What is the most effective method of vertical transportation on site – with mechanical hoist, tower or mobile crane, scaffold plank ramp, mechanical conveyor, bucket and rope?

Guideline:
For single-storey buildings, materials required higher up (at the top of walls or on the roof), can simply be passed by hand from the ground up onto scaffolding erected for bricklaying and plastering, and from there onto the required level. For double-storey buildings, scaffolding could still work. If there is space it is a good idea to build a ramp up the side of the building or over the steps of stairways to the first floor, made of scaffold frames and planks, so it can be used by people with wheelbarrows. For low-rise multi-storey buildings (three to four storeys), a small mechanical hoist is the best solution for a single large building. For a number of buildings spread over the site this becomes uneconomical, and it is better to go back to ramps built over the steps of stairways. If buildings are quite close to each other however, it may be possible to connect them by temporary bridges, and share one hoist between buildings by supplying the bridge (see sketch below). For medium-rise tower blocks (five- to 12-storey blocks of flats), a fixed tower crane (or one that moves along a short track), with a jib (the “arm” that lifts the load) long enough to reach all the buildings is the most effective solution. Cranes are expensive to erect, hire and operate, and should only be on site for the required period. There is no point in having a crane standing idle at thousands of rands per month while you are still excavating for foundations. Discuss your requirements with an advisor from the crane-hire company, and match its lifting capacity with your requirements to keep costs down. Mobile cranes are too expensive to have on site full-time, and are usually only hired for specific days (or even hours) for lifting heavy components in spaces that cannot be reached by other means, for example, lifting a 300 kg safe door over the roof into a second-storey office.

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Mobile crane for vertical transportation

Tower crane for vertical transportation

What types of constructional aids are needed (for example, different types of scaffolding, support work and formwork)?

Guideline:
The general understanding in the industry is that the main contractor provides heavy-duty external scaffolding for use by sub-contractors such as bricklayers and plasterers, while the sub-contractors provide their own trestles and planks for internal work such as plastering, painting, and nailing up ceilings. The entity working with small or emerging sub-contractors may have to provide the internal support work as well – remember to check and cater for this in your cost estimates. Steel pipe frames and props for scaffolding, or support work for formwork are strong, durable and reasonably priced, and are still the most commonly used. If the entity is going to do a lot of building, it is a good idea to invest in a basic set of frames, props and planks. Scaffold planks must be proper saligna (gumtree) scaffold boards at least 50 mm thick. Old pine roof timbers will not do, and are dangerous, as they are usually full of weak spots caused by knots and other defects, and rot more easily when exposed to moisture. Scaffold planks are very expensive and should be well looked after. They must always be cleaned before being stored between jobs. Frames and props must also be cleaned, and working parts such as threads of telescopic props must be kept well oiled or greased. Regular painting will also extend their life. If the price of new equipment is too steep for your entity, keep an eye open for second-hand sales and auctions. Be careful though when buying used frames, especially

Steel props for support

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when they have thick coats of shiny new paint on them – the paint may be all that holds a rusty old pipe underneath together. There are versatile lightweight aluminium support systems on the market, but they are costly and are not as strong as steel. The most common and economical type of formwork for flat concrete slabs is standard steel pans, which can be re-used many times if properly cared for. Likewise, there are standard steel panels clipped together to form “boxes” for column formwork. The contractor must check the design and ensure that column sizes specified correspond with these standard panel sizes. Timber formwork, or formwork made from shutter board is expensive and time-consuming to erect, and has limited re-use. It should be avoided as far as possible, and used only for elements where standard steel formwork will not do the job. Formwork is only needed from time to time for short periods, and it is therefore more cost-effective to hire it when needed. Another alternative is to employ sub-contractors who supply and erect their own formwork. Some, though, will only erect flat decks excluding edges or other vertical formwork, as their insurance does not cover them for the latter. This can be a nuisance, as the contractor must then provide the vertical formwork.

Timber formwork for flat slabs

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Illustration of conventional steel pan formwork for flat slabs
Deck panels Box floor centre hanger bracket Box floor centre

Flat Deck Formwork

Fastrike props and box floor-centres can be used with either pressed or coined deck panels for quick and easy erection and dismantling of soffit formwork

Scaffold tube lacing Fastrike prop 50x50 Band and plate coupler

Steel column box

Guideline:
For small volumes, excavating by hand is generally best (and provides more employment). To have an excavator on site for a day is expensive. The machine may only be required for an hour or two, meaning you pay for transportation and idle time out of proportion to the value of the work to be done. For longer runs of trench excavation (strip footings for long buildings, or sewer trenches), it is most economical to take out the bulk of the material by machine, and then trim by hand. For large volumes and deep excavations such as in cut and fillover site, and basements, using machines is more productive and economical. There are many different types of specialised excavating and earthmoving equipment, and the most appropriate machine for the job should be hired. On small and medium-sized excavations, it is best to get a multi-purpose machine such as a combination “tractor-loaderbackhoe” (TLB) that can be used to dig trenches and do bulk excavations, load excavated material onto trucks, and do general lifting and carrying around the site (see illustration of TLB at work). Small quantities of rock or old concrete encountered in foundations can be broken up and removed with picks and crowbars if there are seams to get into, or by means of pneumatic hand-held breakers. Large quantities of solid rock may have to be blasted with explosives. This is specialised work; permits and extra safety precautions will be required in urban areas.

Excavation by hand

Excavation by tractor-loader-backhoe (TLB)

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Concrete and mortar – to mix on site (by hand or by mechanical mixer) or to buy ready mix?

Guideline:
According to conventional wisdom it is more economical to mix on site. This is sometimes a fallacy, and contractors are notoriously unable to estimate properly for the true costs of site mixing once all the waste factors and breaks in productivity have been accounted for. Quality control is also more difficult with site mixing, but it does provide more employment for manual labour. If ready mix is used, concrete pours must be well planned and efficiently executed. Delivery trucks run on a schedule, and cannot afford to stand around while concrete is laboriously transported by wheelbarrow from the point of off-loading to where it is needed on site. Although the cost of hiring a concrete pump may seem prohibitive at first, it is often more economical in the long run because of he time saved. Mixing by hand is labour-intensive, but slow and not effective for larger quantities. Mechanical mixers provide better consistency and quality in the mixing of concrete. They come in all shapes and sizes, from small portable drums with electric motors to those operated by crank, to large petrol-driven machines that can yield up to a cubic metre per batch. For large projects, it is most economical to set up concrete batching plants where cement is delivered and stored in bulk in metal silos, dispatched into hoppers from where it is fed into the mixing plan, and aggregates are shovelled directly from stockpile into the mixer with dragline and bucket. Batching is done by weight rather than volume, and is more accurate.

Mix by hand

Batch plant on site for bulk mixing requirements

Ready mix for delivery to site

Mix with concrete mixer

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Plant and equipment – to own or to hire?

Guideline:
Careful calculations are required (see also pricing of plant in the section on Estimating and Pricing further along in this document) to determine which option is more economical. Owning plant means you carry the fixed annual cost (depreciation, finance charges/loss of interest on capital, insurances) even when the machine is not working and recovering those costs, maintenance and repairs are your responsibility. Owning also brings about a certain inflexibility and potential mismatch between what you have, and what is required on a specific project (for example, the mixer you own may be too large or too small for a particular project to be practical and cost-effective), whereas if you hire you can get the right machine for the job. If you hire on the other hand, you pay for the rental company’s overheads and profits, and delivery and repairs during emergency breakdowns could be unreliable. The rental company is responsible though for all the “hassle” of owning plant – insurance, maintenance and repairs, transporting around, keeping up to date with the latest models, and for starters, it is advisable to hire rather than purchase plant, especially larger, more expensive pieces that are only needed from time to time.

Site establishment, temporary works and services, general management requirements (preliminaries)
Contract preliminaries (prelims) or preliminary and general (P&G)
Construction is about more than just labour and materials. The construction process needs to be planned, coordinated, supervised, and supported with temporary works and services. The contractor must provide competent staff on site to manage and supervise the work, draw up programmes and keep them updated, prepare reports and other documentation for site meetings, assist the professional team in checking for correct setting out and levels, and keep track of when progress payments are due. The contractor needs water, power, lighting, plant and equipment, temporary works such as scaffolding, hoardings, traffic-diversion equipment and timbering (support) to carry out the work. There must be site offices for meetings, sheds for safe storage of materials and tools, ablutions for the workers on site, fencing and security, name boards, certain fixed plant such as concrete batching plants and vertical hoists or tower cranes (sometimes also referred to as site establishment). The contractor must usually provide sureties that will make available funds for completion of the contract should the contractor

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fail to do so, and take out insurance for damage or loss of the works, loss or injury to workers, and third-party liability. The contractor is also responsible for security of the site (fencing, access control and guarding). He must provide samples of materials for approval by the employer or architect, protect the completed works against damage, regularly clean the site, and cart away the rubble. All of the above are usually priced separately from the direct labour and material costs, and are collectively referred to as preliminaries or preliminary and general.

Site offices

Storage sheds

Storage containers

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Preliminary cost estimates vs. detail cost estimates
Estimating for different purposes and at different phases
As part of the development function, it is necessary to estimate total development costs, including land, town planning and surveying; service connections; plan-scrutiny fees; escalated building costs; professional fees; and finance charges. This must be done so that the total funding requirement for the project can be determined, and financial viability studies can be done. These estimates are usually done at an early stage when only preliminary concept designs or sketch plans are available, and methods are used that do not rely on detailed and accurate measurement off completed drawings. Once the decision, based on the preliminary estimates, has been taken to proceed, and more detailed working drawings have been prepared, it becomes necessary for the contractor to measure the quantities, and estimate the construction cost accurately. This is done so that the work can be properly planned and programmed, resources allocated, and materials ordered. This detailed estimate is also used as a baseline or budget for cost monitoring and control by the contractor. Where the entity acts as contractor, the construction side needs detailed estimates for the same reasons as above, as well as to provide the development side with more accurate budgets of construction costs to feed into refined total-development cost estimates.

Estimating, cost estimating, rates, pricing and costing
It is important to distinguish between the terms estimating, cost estimating, rates, pricing and costing. Estimating entails the quantification (measurement), and cost estimating entails the valuation (apportioning costs to the different measured parts of the work) of the probable inputs (resources) that will be required to complete the work. The estimated cost is the total estimated quantities (labour, material, plant usage and other indirect costs) multiplied by estimated or known unit cost. It is usually used as one of the considerations in the determination of a price at which the contractor is prepared to do the work. Pricing, therefore, is a business decision: what amount (including some profit) does the contractor want to sell his/her labour, material, management skill and willingness to take risk to the employer/client for. For the entity acting as main contractor, these distinctions help in estimating likely sub-contract prices (and estimating price negotiations with sub-contractors) on the one hand, and on the other hand the over-and-above costs that will be incurred by the entity as main contractor. We can further distinguish between price and rates. Price usually means the total amount at which the contractor will erect the building or erect a certain portion of the work, whereas rates are the “prices” per unit of separate individual items of work, which make up the total price. Price, therefore, is quantity x rate.

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Costing is the collating of cost information during and after the erection of a building, and the processing thereof into monetary terms, mainly to monitor the profitability of the project or contract, and to make changes to improve it. It also provides the estimator with information for future estimating.

What is included in a main contractor’s price build-up?
It is important to understand what is normally included in the main contractor’s price build-up. The reason for this is that when the entity acts as main contractor, it will take on some of the functions that main contractors price for, and if additional resources need to be put in place, then these must be budgeted for on top of the estimates for the different sub-contract works.

The quotes received from sub-contractors normally include:
• Labour • Materials (if applicable), including allowances for wastage • The use of some tools and equipment, including allowances for wear and tear • Sub-contractor’s site overheads (usually low or non-existent) • Sub-contractor’s head office overheads (if applicable) • Sub-contractor’s profit
Some sub-contractors will quote on a labour-only basis, meaning the main contractor must supply, and, therefore, budget for the cost of materials involved. Others may quote on a supply-and-fit (labour and materials) basis, but the main contractor will have to supply some of the materials, for instance the plumber’s quote may include the supply of all pipes and pipe fittings, but the main contractor must provide the taps and sanitary fittings. In plumbing, the main contractor is also usually expected to do some of the work associated with that sub-contractor’s trade. An example is where the plumber’s quote would include the supply of manhole covers, but exclude the building of the manholes. Sub-contract documentation must be clear on these issues, and the main contractor must ensure nothing is left to fall through the gaps when adding up total estimated costs of labour, materials and sub-contracts.

It would be a big mistake to simply add up all the sub-contract sums, and quotes from materials suppliers, and think that is the total building cost. In addition, the entity acting as main contractor would have to budget in some form or other for most of the following costs that would normally be included in the main contractor’s tender price:

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Indirect on-site costs (“site overhead”)
Preliminaries
All of the above are usually priced separately from the direct labour and material costs, and are collectively referred to as preliminaries, which can vary from 7.5% to more than 25% of the contract value.

Attendance on sub-contractors
Providing sub-contractors with scaffolding, power, water and storage; and assisting them with off-loading and handling of materials and equipment (usually varies from 2.5% to 10% of the value of sub-contract work).

Indirect off-site costs (“general, or head office overhead”)
In a building contractor’s business, each contract must contribute towards paying overheads – usually in the ratio of its value to the total turnover of the company). Overheads can vary from 5% to 15% of annual turnover (total annual value of contracts of main contractor’s work). The entity must exercise care when estimating costs. Certain of its head-office resources will be needed to manage the process, and this may mean buying-in additional capacity or specialised skills in the form of extra staff, equipment, office space, etc. or in outsourced form. It is often difficult to quantify the above accurately, but some allowances should be made in budgets and cash-flow forecasts. On the other hand, the entity may save at least a portion of main contractor’s off-site costs, or head-office overheads (office rent, salaries of head office staff, telephones, office equipment, and general insurances).

Elements of a contractor’s price:
• Cost of materials • Cost of labour • Directly attributable cost of plant

Direct cost

+ Indirect cost
• On-site (preliminaries and attendance on sub-contractors) • General (head office) overhead cost

= TOTAL COST (ESTIMATED) OF ITEM OR PROJECT +
• Profit

= RATE AND/OR PRICE

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Building up rates and building price from first principles
The steps in determining rates are as follows:
• Quantify (measure) the amount of work that needs to be done (for example, m3
concrete, m2 walling, m2 plastering)

• Break the quantities down into their individual constituent ingredients or inputs
(labour, materials and other resources) by using labour constants, mixing tables, etc. (For example, work out the number of pockets of cement, m3 of sand and stone, hours of labour in handling, mixing and placing of a m3 of concrete of certain mix proportions and application)

• Determine unit rates for each measured item of work (in the case of schedules
or bills of quantities) by multiplying the quantities of constituent parts of an item of work by their unit costs (for example, 5 pockets of cement x R48.00 = R240.00) adding the costs of the constituent parts together, and then adding allowances for overheads and profit, arriving at a unit rate of, say, R730.00 per m3 of 20 Mpa reinforced concrete in footings

Further steps to take to arrive at the total building price:
• Multiply the measured quantities of work by the unit rates to determine the
“price” of individual items of work

• Add all these together to arrive at the total price (taking into account other
allowances such as provisional sums, contingencies, etc.)

Estimating costs of material, labour and plant
General aspects to be evaluated and decided on:
• Plant - decide whether to hire or buy (weigh up cost and risk vs. risk and
utilisation)

• Labour - employ own full-time personnel and/or casual labour paid on a time
basis, or per task (piece-work), labour sub-contractors, labour-intensive or a more mechanised working method

• Materials - bulk or convenience buying, central yard or direct delivery, specials
on alternatives

• Allowance for waste - breakage during transit (bricks) and short delivery; wastage
on site due to handling, mixing and installation; loss through theft and pilfering (risk management - insurance); overlaps; joints

• Other factors - inflation/escalation, interest rate fluctuations, cash flow, discounts
for early payment vs. return on investment elsewhere

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Estimation of material costs
The cost of material is made up of: • The price per unit paid to the dealer or supplier for the manufactured article • Delivery cost to the site, based on minimum delivery quantity and taking into
account off-loading and storage

• Allowance for waste as defined below • Less discount(s) (if any) as described below Price per unit
This is the price quoted by the supplier in units such as R48.00 per pocket of cement, R8.00 per kg of nails, R950.00 per 1 000 bricks, etc. It is helpful if the estimator knows what units and minimum quantities materials are usually sold in.

Delivery cost
The price per unit quoted for items of smaller bulk that are delivered from the retailer’s own yard often includes the cost of delivery up to a certain radius (say within 10 km or 20 km of the yard). The retailer estimates that in a certain year, say, two 3-ton trucks will travel 30 000 km each on daily deliveries within the chosen radius. The total cost of this is taken as an overhead cost and added as a percentage to the price quoted for all materials. For items of larger bulk or weight, such as bricks, sand, stone, cement, etc. where the cost of delivery is significantly influenced by distance, prices are usually quoted ex yard, and additional charges are made for loading, and on a rate per km or per area/zone for delivery. Delivery is also charged for smaller items that are delivered outside the normal radius.

Waste
Waste is that portion of materials that is lost in handling and processing and cannot be re-used in the permanent structure (see also the section on materials management). Deliberate and negligent wastage or damaging of materials is not regarded as waste. While loss through theft is not provided for, this is insured against.

Discount
General discount to the trade Suppliers often provide materials at lower prices to contractors than to the public. All steel window suppliers, for instance, work from a standard price list. Different discounts off the list prices are then offered to different categories of buyer. A small once-off sale to an unknown client may happen at a discount of, say, only 10%, while a contractor who regularly buys large quantities may get as much as 50% to 60% off the list price. The entity acting as contractor should vigorously negotiate for these kinds of discounts.

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G U I D E L I N E S CONSTRUCTION MANAGEMENT

Settlement discount This is offered by the supplier to the contractor as an incentive to pay accounts on time (usually 2,5% or 5% discount for payment within 30 days). Compare this with interest earned at a bank: Say the cost of a contract is R20 000, made up as follows: Labour Material Contract cost R10 000.00 R10 000.00 R20 000.00

If the material is paid for within 30 days, there is a 5% discount, therefore: Material costs: R10 000.00 less (5/100 x 10 000) = R9 500.00 (Saving is R500) If the R10 000.00 was kept in a call-account for 30 days at 6% p.a., it would earn interest of R10 000 x 6/100 x 30/365 = R49.31. By judicious timing of purchase dates, the entity can get almost 60 days to pay, without forfeiting any discount. Accounts are usually made up on the 25th of a month for all orders delivered up to then. Say the entity orders an item on the 26th of the previous month (that is after accounts for the previous month have closed), he or she will receive an invoice for that item after the 25th of the current month (around the end of month), and will only have to pay for it 30 days after that.

Example:
± 60 Days

JAN

25

FEB

25

MARCH

25

APRIL

Contractor Buys Cement

Contractor Pays Account Less 5%

Supplier’s Accounts Close

Supplier Sends Statement

Cash discount These are attractive discounts to encourage contractors to pay cash. Bulk discount This is a discount for large quantities, to encourage contractors to buy in bulk.

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S H F BP5 2006

Example of estimating the cost, rate and price of material
Measured item in the bill of quantities: Description
One-brick wall in 1:5 cement mortar

Unit
m
2

Quantity
120

Rate
?

Price
?

The cost and rate of materials for the above item could be calculated as follows: Estimating cost of materials for the above (per m2):
Bricks (after discount to trade): Price of bricks ex yard: Loading and delivery cost Net cost of bricks delivered to site R 450/1 000 R 200/1 000 R 650/1 000 R 71.50

Net per m2: (1.0/(0.22x0.085)=53x2=106+4%(waste)=110/m2@ R650/1 000 Mortar (0.072m3/m2): Building sand: 5/6 x 0.072 x 1.5 = 0.09m3 @ R90/m3 (del. Incl.) Cement : 1/6 x 0.072 x1.5/0.033= 0.55 sk @ R36 (del. Incl.) Sub-total Waste: 5% say Total cost of materials for above (per m2) Add profit of say 10% (per m2) Total Unit Rate

R 8.10 R 19.80 R 27.90 R 1.40 R 29.30 R 100.80 R 10.08 R 110.88

The completed estimate of material price for the item would be as follows: Description
One-brick wall in 1:5 cement mortar

Unit
m
2

Quantity
120

Rate
110.88

Price
13 305.60

Estimation of labour costs
The cost-to-company of labour is made up of:

• Basic wage per hour • Compulsory contributions by the employer in terms of the Collective Agreement
between employers and organised labour for the particular area, in accordance with the Labour Relations Act (medical aid, bonus, holiday fund, etc.)

• Other statutory contributions by the employer with regard to Skills Development
Levies, accident insurance, Unemployment Insurance (UIF), and Regional Services Councils (soon to be replaced with a new business tax)

• Agreed travel and/or accommodation and living-out allowances for out-of-town
projects, as and when applicable
The above costs are converted to an all-inclusive cost per hour and multiplied by the average time (labour constant) that it takes to produce the unit of work in the bill or schedule.

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G U I D E L I N E S CONSTRUCTION MANAGEMENT

The Labour Constant (LC)
Definition • The term given to the average time it takes a healthy, worry-free, diligent
tradesman or worker to do a certain unit of work under normal working conditions during average weather conditions

• It is that factor which, if multiplied by the relevant rate, will give the labour cost
for a particular operation or process

• Labour constant = time required to perform the unit of work
The labour constant is calculated by keeping record of the time it takes a group of workers to do a large amount of a certain type of work over a period (1 year) under all kinds of working and weather conditions. The quantity of work units or output is measured and the total time is divided by the total number of units of work. The labour constant multiplied by the total cost per hour, i.e. wage, contributions and labour overhead of all the workers required to produce the unit of work, is the net labour cost of that unit of work.

Examples:
(i) One worker takes 2.5 hours to dig a trench of 1 m3 Labour constant = 2.5/1 = 2.5 (ii) It takes four workers five hours to dig a trench of 0,5m x 8m x 2m Calculate the labour constant: LC = t/unit: 4 x 5 = 20 h divided by 0.5 x 8 x 2m = 8 m3 = 2,5 or: Four workers take five hours to excavate 8m3. One worker, therefore, would have taken 20 hours to excavate 8 m3. For 1 m3 we therefore have to divide 20 by 8: 20 hours/8 m3 = 2,5 (labour constant) The labour constant is then multiplied by the hourly rate of a worker to arrive at the labour cost of a specific activity

Compiling tables for labour constants
The basic principles are: 1. The unit in which the labour constant is reflected must relate to the unit of measurement in accordance with the Standard System of Measurement used, for example, for excavations the labour constant must be expressed in hours per m3. 2. All operations which are common to similar but different end results must be kept separate. Overlapping and gaps must be avoided, for example:

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S H F BP5 2006

In concrete work, separate labour constants would be used for the following discrete activities:

• The transportation of ingredients from stockpile to place of mixing (e.g.
LC = 0.5, therefore it would take one worker 0.5 h to transport 1 m3 of materials)

• Mixing (by hand) (e.g. LC = 3.5, i.e. it would take one worker 3.5 h to mix
1 m3 of concrete)

• Loading into barrows, and transportation to place of pouring (e.g. LC = 0.5,
i.e. it would take one worker 0.5 h to transport 1 m3 of materials)

• Placing and levelling of concrete in foundation trenches (e.g. LC = 0.75, i.e.
it would take one worker 0.75 h to place and level 1 m3 of mixed concrete) Although there are small theoretical differences, for practical purposes and within measurable margins, the labour constants for transporting and mixing are the same for all strengths of concrete. Thereafter the placing, spreading and compaction for different building elements are different. Placing in foundations is easier and quicker than placing in columns, etc. 3. Avoid division into too many operations. 4. LC for transportation of materials on site must be based on average trip distances, say 25 m per trip. 5. Distinguish between operations only if there are measurable differences in the LC. 6. Instead of additional tables, use multipliers where possible.

The multiplier
The multiplier is a factor that indicates how much longer a particular operation takes under circumstances different to the norm. Carting mixed concrete over a distance of not more than 25 m would, for instance, have an LC of 0.5 h. Carting up to 50 m would take twice as long and a multiplier of x2 would therefore be applied to the basic LC of 0.5. The use of multipliers reduces the number of tables that need to be compiled for LCs, and allows for discretionary adjustment of basic LCs when it is clear to the estimator that a standard piece of work is going to be executed under non-standard conditions.

Example:
From the tables, an LC of 0.75 is given for the placing of concrete in foundation trenches. Instead of giving separate tables for placing in columns, which is more difficult and takes longer, a multiplier of say 1.8 is used. The LC for placing concrete in columns therefore, is 0.75 x 1.8 = 1.35.

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G U I D E L I N E S CONSTRUCTION MANAGEMENT

Factors that influence production (to be taken into account when compiling and/or using LCs and multipliers):
Weather conditions
(i) Wet weather: Roads can become impassable. Trucks cannot get out of basement excavations. Workers cannot work in the rain unless cover is provided. (ii) Exceptional cold: Workers constantly seek shelter to warm themselves. Concrete plastering and masonry work cannot be carried out in freezing weather. (iii) Exceptionally warm weather: Workers become exhausted and must break for fluid intake more often. (iv) Wind and dust: Dust gets in workers’ eyes. Materials are difficult to handle. Cranes cannot be used. (v) Overcast weather: Lack of light slows down or stops work.

Organisational factors
(i) Materials shortages: Results in waiting time and demoralisation of workforce. Materials stored untidily or far from the work area reduce efficiency. (ii) Untidy site: Reduces efficiency and leads to accidents. (iii) Poor worker relations: Foreman shouting and swearing at workers, workers not properly informed and motivated, inappropriate grouping of people with regard to skills, etc. (iv) Poor lighting: leads to sloppy work, mistakes and accidents. (v) Inefficient and poorly maintained plant and equipment. (vi) Workers’ wages less than on other sites in the same area.

Personal problems
(i) Illness of workers. (ii) Domestic problems: financial problems or illness in the home. (iii) Exhaustion due to poor nutrition or work not suited to person’s personal ability and strength. (iv) Demand for and supply of labour: in times of high demand, production rates are generally lower than in situations of oversupply of labour. When a contractor is tendering for work within its normal area of activity, the LCs should take into account expected average weather conditions for the area and time of year. Where the work is elsewhere, adjustments will have to be made for differences in the expected weather conditions.

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S H F BP5 2006

Example 1: Estimating labour costs, rate and price
If we use the same measured item that was used for estimating material price in the example above, then: Description
One-brick wall in 1:5 cement mortar

Unit
m2

Quantity
120

Rate
?

Price
?

Estimating labour cost for the above: For this type of work, a small team consisting of one bricklayer and two assistants will be considered as a unit working together. The assistants will be mixing mortar, transporting materials, helping with the erection of scaffolding, etc. so that the bricklayer is free to lay as many bricks as possible in a day. Say the unit is able to lay 900 bricks in a day of 8 hours, and the team’s total cost to the company is made up as follows (no living-out or travel allowances): Description
Basic wage Compulsory employer contributions (medical, bonus, holiday, etc.) Other statutory contr. (skills dev., UIF, RSC, etc.) Total/Hour

Bricklayer/h
R 20.00 R 2.50 R 1.50 R 24.00

Two assistants/h
R 8.00 x 2 = R 16.00 R 1.50 x 2 = R 3.00 R 1.00 x 2 = R 2.00 R 21.00

Total cost per hour of the unit/team
R 36.00 R 5.50 R 3.50 R 45.00
2

At 900 bricks a day, the LC for the unit is 900/8 = 112.5 bricks/h: Therefore at 110 bricks per m , the LC = 110/112.5 = 0.98 (h per m2) Labour cost per m2: 0.98 x R45.00 Add profit of 10% Total Unit Rate R 44.10/m2 R 4.41/m2 R 48.51/m2

The completed estimate of labour price for the item would be as follows: Description
One-brick wall in 1:5 cement mortar

Unit
m2

Quantity
120

Rate
48.51

Price
5 821.20

The total price for the item (labour and material) would therefore be: Description
One-brick wall in 1:5 cement mortar

Unit
m
2

Quantity
120

Rate
159.39 (110.88+48.51)

Price
19 126.80

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G U I D E L I N E S CONSTRUCTION MANAGEMENT

Example 2: Estimating labour costs, rate and price
Measured item: Description
Reinforced concrete 20 MPa in columns (ground floor)

Unit
m
3

Quantity
10

Rate
?

Price
?

Total cost to company of labour: Description
Basic wage Compulsory employer contributions (medical, bonus, holiday, etc.) Other statutory contributions (skills development, UIF, RSC, etc.) Total/Hour

General worker/h
R 8.00 R 1.50 R 1.00 R 10.50

Semi-skilled worker/h
R 12.00 R 1.60 R 1.40 R 15.00

Estimating labour costs for the above: Note: The contractor has studied the drawings and visited the site and noticed that:

• The columns are on the ground floor • His mixing platform will be about 40 m away from the stockpile
of materials

• The columns will be less than 25 m away from the mixing platform
but the ground level will be about 5 m higher than the mixing platform, meaning transportation of mixed concrete will take longer than allowed for in the standard LC for this activity

General worker:
Transport materials from stockpile:
0.5h x 2 (multiplier for distance 25-50m)= Mix concrete: 3.5h/m3= Transport concrete to position: 0.5h x 1.2 (steep slope multiplier)= Semi-skilled worker: Place and consolidate concrete: 0.75h x 1.8 (multiplier for columns)= Estimated labour cost for the above Add profit of say 10% Total Unit Rate 1.0h 3.5h 0.6h 5.1h 1.35h @ R 10.50 = R 53.55 @ R 15.00 = R 20.25 R 73.80/m3 R 7.38/m3 R81.18/m3

The completed estimate of labour price for the above item would be as follows: Description
Reinforced concrete 20 MPa in columns (ground floor)

Unit
m3

Quantity
10

Rate
81.18

Price
811.80

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S H F BP5 2006

Estimation of plant costs
Plant (machines, equipment, scaffolding, tools, etc.) can be priced in one of two places. If the cost of use of a particular piece of plant can be linked exclusively to a specific measured item of work, then it is customary to price for its use in the rate of that item. A concrete mixer, for instance, is used only to mix concrete and mortar. The cost of its use can therefore be recovered through the rates for concrete, brickwork and plastering. A tower crane, on the other hand, is used for many different things on a site. It would be impractical to try to apportion its costs to the hundreds of different items it transports daily. An estimate is then made of the total cost of using the crane on the project, and it is priced as one lump sum in the preliminaries section of the bill of quantities under the item “plant and equipment”. Plant has two types of costs. One is annual cost. This is made up of the costs incurred by owning the piece of plant, regardless of its usage, for example, annual depreciation of the asset value (purchase price), finance costs, insurances, licensing, maintenance and servicing. The other is hourly cost, i.e. direct operational costs such as fuel, lubricants and operator wages.

Annual cost of plant
Annual depreciation
From the moment you buy a piece of equipment, it starts depreciating in value. This is because it will eventually be used up and will have to be replaced sometime in the future. Provision must be made for this in order to recover the cost of using the equipment over its working life, through income from contracts. There are various methods for calculating annual depreciation, each with different implications for tax and the company’s financial reporting. In this example, we will use the straight-line method where the value of the asset (purchase price less salvage value at the end of its life) is depreciated by equal amounts per year over the extent of its working life.

Finance costs
If the plant is bought with borrowed money (financed by a bank), there are annual interest costs. If the plant is bought with own reserve funds, the money is not available for investment where it could potentially earn interest or other income. This loss of interest or income is a cost.

Licensing
Bigger plant often has its own road wheels for transportation and would have to be licensed with the traffic authorities.

Insurances
Plant must be insured against loss of or damage to the asset, as well as for thirdparty liability.

Maintenance and servicing
Provisions for this cost would be based on manufacturer estimates or, if available, the company’s own records.

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Hourly cost of plant
(Note: Remember (i) that manufacturer’s claims of production rates, energy consumption, and maintenance intervals are optimistic; and (ii) that operating conditions (altitude, dust, extreme weather, operator competence) can greatly influence these factors)

Fuel/energy
Manufacturers’ estimates or past records will indicate the hourly consumption of petrol, diesoline and electricity.

Lubricants
Plant must be oiled and greased on a regular basis and this cost can be as much as 10% to 20% of energy cost, depending on operating conditions.

Operator wages
The total cost of dedicated operators is included here. (A dedicated operator is one who works full-time on a particular piece of plant, for example, a crane driver).

Example 1: Estimating plant costs
Plant has production rates (a concept similar to the labour constant), for instance, a concrete mixer can yield 12 batches of 250 litres each per hour, or an excavator can excavate 20 m3 of soft material to a depth of 1.5 m, etc. Again, there are multipliers for work of a similar nature, but with different degrees of difficulty. The cost of use of the concrete mixer in this example is to be priced into the item rates for each measured item of concrete work 250 Litre petrol-driven concrete mixer: 1. Information:
1.1 1.2 1.3 1.4 1.5 Purchase price Salvage value (2nd hand resale value at end of life) Interest rate for financing Anticipated working life Occupation factor hours/day (The other 2 hours used for cleaning, maintenance, etc.) 1.6 Production weeks (4-week builders’ holiday per year) 1.7 Deprecation method 1.8 Fuel consumption litres/h 1.9 Lubricating oils, etc. 1.10 Repair and maintenance 1.11 Insurance 1.12 Life in years: (11520/6=1920 days/5=384 weeks/48=8 years) 1.13 Yield 1.14 Production/work rate (5 minute cycle) R 30 000.00 R 6 000.00 20% p.a 11 520 hours 6h 48 x 5 days/year straight-line 2.5 litre/hour 20% of fuel cost 10% of purchase price p.a. R 0.10/R 10.00 p.a. 8 years 250 litre/batch 12 batches per hour R R R R R R 3 000.00 3 000.00 3 000.00 750.00 150.00 9 900.00/1440*= R 6.88/h

2. Annual cost:
2.1 Depreciation:(R30 000 – R6 000 )/8 2.2 Interest: 20% x R30 000 x 0.5 2.3 Repair and maintenance: 10% x R 30 000 2.4 Insurance: R0.50/R10 x R 30 000 x 0.5 2.5 Licence fees
*

(11520/8=1440 working hours per year)

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S H F BP5 2006

3. Hourly cost:
3.1 Fuel: 2.5 litre @ R4.00 3.2 Lubricants: 20% x R10.00 3.3 Operator: 8/6 x R12.00/h Total cost per hour Total cost per m3: 3m3/hour (12 x 250 litre/h) R 10.00 R 2.00 R 16.00 =R 34.88/2

R28.00 R34.88 R 11 63/m3

The total cost of using the concrete mixer is R11.63/m3. This cost will be included in the unit rate for each measured item of concrete work in the bill. The cost of transporting the mixer to and from site is calculated separately (it will vary for each contract) and priced in the preliminaries section of the bill.

Notes:
1. Simple interest was used for finance costs above. The interest is paid on a reducing balance (at the end of each year a certain amount of the loan has been paid off and interest is only payable on the outstanding balance). For simplicity, an averaging factor of 0.5 was therefore applied to interest charges, on the assumption that at the beginning of the repayment period (first year), interest is calculated on the full purchase price and at the end the balance is zero. 2. The mixer effectively works only 6 hours per day. The operator is paid for a full 8 hours however (he spends the other two hours on cleaning and maintenance). His attributable cost to the working time of the mixer is therefore 8/6 times his hourly rate.

Example 2: Estimating plant costs
It is estimated that a tower crane will be required on site from month 2 up to and including month 6 of a 7-month contract (= 5 months). The total cost of the use of the crane is estimated as follows, and priced as a lump sum in the preliminaries section of the bill. Estimation of total costs: tower crane (if owned):
Annual cost (calculated as before) say R 216 00.00/48 x 4.25x5 Transportation to and from site: 2 x R 3 000.00 Erection and dismantling: R 10 000.00 + R 8 000.00 Hourly cost: Electricity: 5m x 4.25 weeks x 5d x 6h = 637.5h @ R 10.00/h Operator: 637.5 x 8/6 = 850h @ R15.00/h Total cost of owned crane priced in preliminaries R 6 375.00 R 12 750.00 R139 750.00 R 95 625.00 R 6 000.00 R 18 000.00

If the crane in the above example was hired instead of being owned, the calculation might be as follows. (The plant-hire company would base its hire rate on the same calculations of annual cost plus an allowance for overhead and profit, except that it would be more conservative than the contractor owning his own plant. This is because, among other factors, it would have to maintain better, and replace stock more often to stay in the market with up to date equipment, and because the stock would be subjected to more abuse or carelessness by hirers):

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G U I D E L I N E S CONSTRUCTION MANAGEMENT

Estimation of total cost of crane (if hired):
Plant-hire company charges: Transportation: 2 x R3600.00 (R3 000.00 + 20% o/h and profit) Erection and dismantling: (R10 000 + R8 000)+20% Monthly rental: 5m x R23 760/m (R216 000x1.1+20%)/12 Contractor’s own costs: Electricity as before Operator as before Total cost of hired crane priced in preliminaries R 6 375.00 R 12 750.00 R 19 125.00 R 166 725.00 R 7 200.00 R 21 600.00 R 118 800.00

From the above, it may appear that it is always better to own plant, but this is not necessarily so. The “real” cost of owning plant must take the following into account:
1. Risk of damage, breakage, theft, etc. 2. Having to rent or own storage space 3. Underutilisation, meaning that capital is tied up uselessly instead of earning profits by being available as working capital on new contracts, etc. 4. The restricting cash-flow factor of regular and long-term repayment commitments 5. Hired plant is generally better maintained, thereby reducing downtime due to malfunction 6. Servicing and repairs are the hire company’s problem and just a phone call away 7. Obsolescence, etc.

Estimating costs of contract preliminaries
These are costs connected with organising work on site, and the provision of aids and facilities for the economical execution thereof, such as:

• • • • • •

Personnel Accommodation Plant

Salaries of works foremen, storekeepers, security guards, gatekeepers, crane and hoist operators Temporary site offices, sheds, toilets, etc. Hire charges and/or capital redemption and interest, maintenance, transport to and from site, erection and dismantling All plant on site that are not used exclusively for the production of a particular item of work, for example, cranes, hoists, picks, shovels, wheelbarrows, etc. Hire charges and/or capital redemption and interest, maintenance and running costs Water and power for the works Cost of sureties, insurance premiums, deposits and fees to local authority Cost of meetings, compiling work programmes and cash flows, planning and co-ordinating the works

Temporary services Contract requirements Contract management

The cost of preliminaries on conventional building contracts usually range between 7.5% and 20% of contract value, but can vary considerably between projects, depending on:

• Type of work (building or civil construction, low-rise housing or inner-city tower block) • Size and phasing of project • Location (urban, suburban, peri-urban, rural, out of country). In certain remote or
underdeveloped parts of the world, such as Siberia in Russia, preliminaries could be as high as the actual value of building work because contractors have to establish their own infrastructure, and provide expensive protection against the harsh climate

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S H F BP5 2006

The major cost items under preliminaries are plant and salaries/wages of site staff. Both are directly related to the size and duration of the contract, with duration or time being the major factor
In estimating preliminaries costs (the most difficult part of cost estimating, and best left to an experienced estimator), the following activities are involved:

• After deciding what work will be done manually to increase employment,
assessing what types and numbers of plant and equipment will be needed; and by studying the work programme, estimating how long they will be needed on site

• Drawing up an organogram of site administrative staff needed (excluding labour
directly involved in actual construction activities), and how long they will be needed

• Studying the work force requirement, and contract stipulations to see what
temporary facilities and services are needed for the execution of the contract

• Studying the contract conditions and statutory requirements to see what
insurances are required, and what fees and deposits are payable to the local and other authorities

• Discussing with contracts managers and site staff what the security requirements
are

Estimation of general (head office) overhead costs to be attributed or apportioned to a specific project for recovery
Overheads are those costs that cannot readily be apportioned to specific work items on a project or projects, but which are necessary to execute the project(s). The cost of indirect or general office overheads, which can vary from 5% to 20% of contract value, must be spread over all the projects executed in a particular year, that is to say each project must make a “contribution” to overhead costs.

Example:
Project 2
(5% of contract value)

Project 1
(5% of contract value)

Project 3
(5% of contract value)

CONTRACTOR’S OFFICE COSTS
(say 5% of turnover)

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G U I D E L I N E S CONSTRUCTION MANAGEMENT

Typical general overheads

Accommodation Office space for manager(s), clerks, typists, etc. Storage space for records, plant not in use, vehicles and materials. Total annual rent or an amount that would yield a certain return on investment in own property Depreciation of office furniture and equipment, maintenance and finance charges, stationery, postage, telephone/fax, lighting, heating and cooling, bookkeeping charges Salaries of contracts manager(s), contract surveyors, clerks, typists, other head office staff, time-keepers, security guards, including pension/provident fund and medical aid contributions Cars, bakkies, trucks. Capital redemption and interest on HP contracts, maintenance and repair, running costs, licences, insurance Interest on capital (loans or own capital), bank charges, in connection with financing the business Fire, theft and third-party insurances, municipal service charges (water, power, refuse removal, sanitary charges)

• • • • •

Office equipment and expenses

Personnel

Transport

Finance costs Regular expenses

Estimating overhead contribution
Overhead contributions for each project are commonly estimated by: 1. Estimating the total turnover of all projects for a particular year, say R10 million (value of actual building work excluding preliminaries, provisional sums, overhead and profit). 2. Estimating the total overhead cost that will be needed to support the estimated turnover for that year, say R0.5 million. 3. Expressing the estimated overhead cost as a percentage of estimated turnover (R0.5 million/R10 million = 5% in this case) and adding that percentage to all bill rates for building work. In this way, the total amount of building work carried out during the year will contribute the full amount of overhead needed. This calculation must be reviewed constantly. This is because the estimates of turnover for the year will be adjusted as the real turnover figures start emerging. For example, if by mid-year it is evident that only 75% of estimated turnover is likely to be realised, the contractor will have to either adjust the percentage upward (if market conditions allow), or start cutting overhead costs.

Contingency allowances
This is one of the most misunderstood and abused aspects of estimating. Contractors, consultants (and their clients) see it as a simple case of “add 10% so we have a bit of fat in the estimate”. Contingencies should be divided into two distinct categories of uncertainty or risk, and each category should be considered rationally before deciding on an allowance (past experience is invaluable in this regard): 1. Design and detail development – to allow for lack of detail at sketch plan and estimating stage. This allowance should be high in the early preliminary stages,

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S H F BP5 2006

and reduce with each subsequent estimate as more detail becomes available from the design team. Once tenders are in and construction is ready to start, this could be reduced to a very small allowance, unless parts of the design are still incomplete. 2. Building contract contingencies – to allow for real unforeseen expenditures. The circumstances of the project will determine the amount that should be allowed. It should also reduce up to a point, but an amount should remain in place until construction is well underway, or even until the end of construction. How much to allow will depend on the circumstances. It is usual to allow 2.5% to 5% of estimated final building cost for each category (5% to 10% total) in the preliminary estimates, reducing to 1.5% to 2.5% (3% to 5% total) at tender stage, and reduced even more from time to time in cost reports during the construction phase. (For refurbishment and conversion, the initial contingency should be bumped up to at least 15%).

Cost escalations – why an estimate of current construction cost is not good enough
Note: In the discussion below the general situation where an employer or client engages a main contractor for construction work, is described. In the case where the entity acts as the main contractor, it becomes – for purposes of this section – the employer, and contractor then refers to the sub-contractors it employs. Where it acts as main contractor under contract to another organisation, the term contractor below applies to it. The starting point for all construction cost estimates is the day on which the estimate is done. In other words, the rates used are those that apply on that day as if the project could be completed on the same day. This is usually called the “ESTIMATED CURRENT CONSTRUCTION COST”. This is logical because the rates known to us at this stage can only be from current or (recently) past tenders, and not from the future. To estimate only the current building cost is not realistic. Feasibility studies (of which the estimate of construction cost is an important part) first have to be carried out, tender documentation must be prepared, tenders called and adjudicated, plans submitted for scrutiny and permission to start building by the local authority, etc. This can take from four to 12 months, and even longer on large and complex projects. During this time, construction costs will fluctuate in response to both macroeconomic and local construction market factors. Recently, these fluctuations have usually been upwards because of continued inflation, and it is expected to remain so for the foreseeable future. The anticipated future tender price for the work will invariably be higher than the estimated current construction cost, which must therefore be escalated in full for the estimated total planning period, at a projected rate based on construction market trends.

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Fixed-price contracts
A fixed-price contract is one where the contractor accepts full risk for any fluctuation in the costs of labour and material. Smaller contracts are often fixed-price contracts where the contractor accepts full responsibility for any fluctuation in the costs of labour and material. The employer will not, therefore, reimburse the contractor for any fluctuations in building costs after acceptance of a tender, and the contractor must allow in his tender for any expected fluctuations. Fixed-price contracts can be called for or arranged with a contractor during negotiations, but the employer must bear in mind that if the building period is prolonged (i.e. longer than 12 months), the risks for the contractor are great, which can lead to the initial tender price being abnormally high. There is no way of knowing how much, if any, the contractor allows in his tender for this risk. When the market is competitive (with many builders chasing little work), contractors tend to use the escalation risk as a competitive variable. In plain language that means they will load their tenders with as little as possible, and hope to put the screws on their suppliers and sub-contractors (who should be equally hungry for business) to keep their input prices fixed as well. When the economy is booming and there is too much work around, the opposite will be the case. The main advantage of fixed-price contracts for the employer, on the other hand, is that the final cost is known with greater certainty from the beginning (making budgeting less risky).

The time factor
From the above it is clear that, in order to be able to estimate preliminaries and escalation costs on a construction project, one must be able to estimate the length of the construction period. The project planning and construction periods (time) have an important effect on time-related cost aspects such as:

• Preliminaries (especially salaries, plant and other time-related items) • Pre- and post-tender construction cost escalations • Financing cost (interim interest)
It is also of benefit to the client if a project can be completed in a shorter period so that it can generate an income stream sooner. The effects of time on final building costs as outlined above must always be taken into account in building cost estimates. This requires highly specialised knowledge and skill, as found in the competent professional quantity surveyor (QS).

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Estimating project planning and construction contract periods
The pre-tender project-planning time-line
At the time the first cost estimates are done, there is much to do before construction work starts. All or most of the following processes and activities may still need to happen:

• Acquire and secure the land (option periods, offer to purchase or Land Availability
Agreement, registration of transfer in deeds office) – anything from two to six months (during this time preliminary designs and feasibility studies can be done)

• If required, township establishment or rezoning, or other formal town planning/
legal procedure, including Environmental Impact Assessment (EIA) to clear obstacles to development – anything from an absolute minimum of six months for rezoning (more likely eight to nine months), to nine to 24 months for township establishment

• If the above is not required (and land is already zoned for the intended purpose)
proceed to the next step, namely:–

• Architect prepares site development plan, followed by other drawings for
municipal submission (two to four months)

• Await municipal approval and permission to build – anything from two to four
months (during this time the professional team could proceed with preparation of technical and tender documentation, and call for tenders so that municipal approval and go-ahead to contractor more or less coincide) It is important for the contractor to understand the lead times in the overall development process, to enable him/her to provide for cost escalations in estimates.

A typical time-line for pre-construction project planning where the land is already proclaimed and correctly zoned, and requires no further formal town planning procedures
Activity
Define project Identify land Acquire land Market surveys Feasibility Documentation Plan approval Tenders

Time in months
1 (to 3?) 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16

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A typical time-line for pre-construction project planning where the land is already proclaimed, but requires rezoning:
Activity
Define project Identify land Acquire land Rezone land Market surveys Feasibility Documentation Plan approval Tenders

Time in months
1(to 3?) 2 3 4 5 6 7 8 9-16 17 18 19 20 21 22

The above are indications only. Real times will be affected by the degree to which the developing institution is willing to take the risks involved in overlapping some activities, the availability of money to fund land acquisition, rezoning costs, professional fees for documentation, and administrative delays in getting Land Availability Agreements set up. From the above it can be seen that the time between project initiation and having a builder on site is around 12 to 16 months in straightforward cases, and around 20 to 24 months where there are complications involved, such as rezoning. These periods vary considerably according to individual circumstances and the degree of overlapping the developing institution is willing to risk (for instance initiating land acquisition before preliminary studies are complete, proceeding with town planning procedures on risk before the property is transferred, preparing full tender documentation before plans are approved). Township establishment could take slightly longer than rezoning in simple cases (single piece of land owned by council), or could add anything from 12 to 24 months to the normal process in cases where, say, a new estate is to be planned on previously un-proclaimed land. This is because new land-use layouts have to be prepared and submitted to several government departments for input.

The critical-element method for estimating a construction period
The most accurate way of estimating construction periods is to measure rough quantities of the critical elements (bulk earthworks, basements, concrete and steel structures, etc.) and then to draw up a bar chart or critical path programme by calculating the duration of each critical activity according to its quantity and typical production rates.

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This would be far too time-consuming at the time of estimating, and a quicker method is required. A simplified version of the critical-element method is therefore the most appropriate estimating tool. It is based on the observation that the concrete frame in the case of multi-storey buildings, and the walls, slabs and roofs in the case of, say, walk-ups are usually the main critical elements. The method is to first estimate the time needed for the structure, and then to add time for start-up and finishing off respectively.

Planning and programming of the works
Work or production planning
Production planning starts with analysis of the works, and the smallest parts of its components. In project management, the term Work Breakdown Structure (WBS) is used, where activities are set out on an inverted “tree”, where each lower level of branches represents more detailed breakdowns of clusters of activities. Each activity or job is then planned while taking into account the materials required, and the resources of labour and plant required and available. This includes a close study of all the contract documents – such as drawings, specifications, bills of quantities, conditions of contract – so that all activities and important conditions and prescriptions that influence the method of execution can be noted. All the main activities are then scheduled in logical sequence on a building or works programme.

Purpose of the building programme
The building programme reflects the agreed sequence and duration of construction activities on a particular project. The purposes of a building programme include:

• To provide a timetable for co-ordinating the following:
• The issuing of drawings and other information needed for construction • The placing of orders and drawing up of delivery schedules for materials • The work of sub-contractors • Hiring and/or bringing onto site plant and equipment

• To show the logical sequence of operations so that work can be planned on a
daily, weekly and monthly basis

• To show the times available for activities so that output rates for labour and plant
can be determined and resources allocated

• To provide a measuring tool for monitoring progress • To provide a tool for estimating cash-flow projections and financing
requirements

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Programming techniques and tools
Programming tools vary from simple charts where activities are listed in sequence from top to bottom along the vertical axis, and the time an activity takes and where it belongs in the sequence are depicted graphically by lines or bars on the horizontal axis time-scale (bar chart or Gantt chart), to complex computerised network techniques. Programming requires a good understanding of the construction process, and how changes in the duration and/or sequence of activities in the process impact on each other and the completion date.

Bar charts or Gantt charts
The usual procedure for preparing a bar chart is to: • Prepare a list of discrete activities in the most logical sequence • Estimate the time and resources needed for each activity • Draw a horizontal bar on a time-scale for each activity, with the length of the
bar representing the time on the scale in days or weeks

• Plot the bars for all the activities on a chart, with activities listed in sequence
on the vertical axis, and the time bars for each activity correctly positioned in accordance with the horizontal time scale (including overlap of activities where appropriate)

Example
Prepare a list of activities:
The list should include all activities, from clearing of site and site establishment to final inspections and hand-overs. For the main or master programme, activities are reflected in broad categories, for example: 1. Site clearance and levelling 2. Site establishment 3. Setting out the works 4. Foundations:

• 4.1 Excavations • 4.2 Concrete • 4.3 Brickwork
On larger projects, a more detailed sub-programme for each major activity, such as structural concrete, will be prepared for internal use.

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Activity lists are drawn up as follows:
Number each activity in batches of 10’s if the order of activities is not perfect it can be corrected later. Put a brief description of each activity here Put the time it will take to complete each activity here. Work only on working days to start with, excluding weekends & holidays. Note who is resposible for the activity in this column

Activity No

Description

Duration (days)

Responsibility

To assist you, the following list of typical activities on a residential building project is given. The activities in the shaded blocks are normally included in the building programme, while the unshaded ones represent actions the contractor undertakes in the “background” as part of internal management of the contract:

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List of typical actions involved in the erection of a residential building
After signing of contract, but before starting construction
Programmable construction activities Formal handing-over of site to contractor, including: • pointing out boundary pegs and benchmarks and encase them in concrete • providing sets of documentation (drawings, bills of quantities, contract) • agreeing format and schedule of site meetings “Background” planning and management activities Contractor’s construction planning • Allocate resources • Prepare building programme and cash flow

Construction phase
Ongoing activities by contractor during construction: • Coordinating services with building work, such as: • Excavating for sewer and water pipes • Electrical cables, inspection, backfilling and impaction of trenches, building • manholes • Chasing for pipes, etc. in walls • Building in water pipes and electrical conducting • Final connections, tests and inspections • Ordering materials timeously • Ensuring that sub-contractors and specialists are provided with information, coordinating their work, and monitoring for proper execution

Demolitions:
• Demolition of old structures that will not be re-used

• Obtain demolition permits from local authority

Existing services:
• Disconnection/sealing off/removal of existing drains, water pipes, cables that will not be re-used

Site clearance and levelling, including:
• Clearing site of vegetation (grass, weeds, shrubs) and rubble • Tree felling

Site establishment, including:
• Fencing of the site • Arrange with local authority for temporary water and power connections and pay deposits • Arrange with plumber and electrician for installing temporary pipes, taps, distribution boards for the above • Placing of site facilities, major plant and materials stockpiles

• Order items with long delivery lead times, for example: • Bricks • Door and window frames • Master keyed locks • Sign contracts with sub-contractors (plumber, electrician, etc.) and provide them with plans and work programme • Get kitchen layout from owner/architect and place provisional order • Arrange compaction tests for fill and layer work

Cut and fill to levels (oversite excavation or bulk earthworks) Set out foundations Excavate foundations to correct levels

• Order steel reinforcing if required • Arrange inspection of excavations by municipal, NHBRC and bank inspectors, and architect or engineer as applicable • Arrange delivery of concrete

Place reinforcement in strip footings and structural column bases where applicable Concrete foundations Erect first lift (ground to 1st floor) of structural concrete columns and walls as applicable, including:
• Fix reinforcing steel cages • Erect shutters • Pour concrete

• Arrange inspection of steel by inspectors and engineer as applicable

• Arrange inspection of steel by engineer

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Surface beds/ground floor slabs, including:
• Filling under floors • Soil poisoning • Laying damp course membrane under floors • Arranging plumber and electrician to lay pipes and conduits under floors • Arranging and casting concrete in surface beds • Striking and curing of surface beds

• Arrange inspection of filling, compaction tests if required

If load-bearing brick structure with slabs resting on walls) – Build ground floor superstructure walls to wall plate height for single-storey, or underside of first slab for multi-storey, including:
• Laying damp course under walls and setting up door frames • Working out the brickwork gauge (heights of courses, cills, lintels, wall plates, etc.) and setting up profiles • Setting up and building in windows, lintels, pipes, conduits, wall ties, roof ties, brick reinforcing, etc. as the work proceeds • Treating and bedding wall plates, or • Placing bearing surface joint material for slabs (malthoid and polystyrene)

• Arrange inspection of DPC as applicable

(If multi-storey framed structure with infill brickwork) – Erect first floor slab, including:
• Erecting support work for decking (formwork) • Decking • Fixing steel reinforcing • Arranging plumber and electrician to lay pipes, conduits and fit sleeves, etc. • Pouring concrete Formwork can usually be stripped after 10-14 days with some props staying in place a little longer to allow building work to continue under the slab

• Arrange delivery of steel reinforcing • Arrange delivery of concrete • Arrange inspection of steel by engineer

Ground floor infill brickwork (Followed by subsequent slabs and infill brickwork at the different levels as applicable) Roof structure, including:
• Ordering, or making on site and erecting roof trusses, purlins/tiling battens, etc. (Remember bracing)

Build gables and beamfilling Lay roof covering and bed on walls, including plastic underlay as required Instal window sills (remember DPC) Plaster walls and screed floors Instal ceilings Glaze windows Fit window handles, catches, etc. and service Hang doors and fit locks
(UNIT CAN NOW BE LOCKED) • After plastering, arrange for specialists to measure for kitchen units, built-in cupboards, glazing • Instal ceilings only after plastering, and do glazing and hanging of doors only after plastering and ceilings to avoid risk of damage

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Start paint undercoats Finishing, including:
• Installing cupboards, kitchen, fittings, skirtings, curtain rails, towel rails, toilet paper holders, etc.

Plumbing 2nd fix (installing fittings) Electrical 2nd fix (wiring, etc.) Fix wall and floor tiles Plumbing final fix of fittings, taps, etc. Final paint coats Lay carpets, vinyl flooring, etc. Electrical final fix - Hanging light fittings, and testing power Snagging inspection Cleaning, rubble removal, snagging, etc.
• Practical completion inspection and snag list by architect • Final inspections and issuing of occupation certificate by municipality NOTE: External works like driveways and walkways, paving, gardening, etc. Are carried out continuously as and when possible, and are usually programmed as a long bar starting at the earliest practical date and ending with completion of the project

Estimating duration and resources needed for each activity
This can be quite difficult on large or complex projects such as multi-storey buildings. Although the science of work study provides us with typical or average output rates for labour (labour constants or time it takes for one worker to complete a certain task) and plant (cubic metres of soil that can be excavated by an excavator in an hour or a day), it remains to apply that information in a sensible manner. If one worker takes three hours to excavate by hand one cubic metre of soil, it does not necessarily mean that 30 cubic metres can be done in the same time if 30 workers are simultaneously excavating soil. There are many practical aspects to consider – what is the optimum size of a team doing excavations that will facilitate adequate supervision and control over productivity and quality, how many teams can practically be working on a limited site at any one time, how many suitably skilled workers are available to the contractor, what to do with surplus workers once a certain task is completed (can they be absorbed into other subsequent activities, or will the contractor have to retrench workers). If the contractor owns one concrete mixer with a maximum daily yield or output of, say, 32m3, and it takes one worker 0.5 hours to place and level a cubic metre of concrete (maximum output of 16m3 in an eight-hour day), it would be pointless having more than two such workers on site while concrete work is being done. More workers will be required to transport raw materials from the stockpiles to the place of mixing, to operate and clean the mixer, and to transport the mixed concrete to the works.

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The calculation of resources for the whole operation would find the right balance between the potential output of the machine and the amount and different categories of workers required, to ensure that everyone is kept busy for optimum productivity on the day. Economic periods for each activity or operation are calculated to fit within the overall time allowed for the project. This is commonly referred to as Resource levelling. It is quite a complicated process, and should not be attempted the first time without help from an experienced construction manager or works foreman. Consultation with specialists such as formwork erectors should also form part of this process. Although work study (based on scientific and published research and/or our own observations and records) provides us with average output rates, each project and each site is different, and as in cost estimating, we often have to apply adjustment factors or multipliers to the averages to account for specific circumstances such as:

• Site gradient, size and shape – it takes longer to transport materials by barrow
on steeper sites. Confined sites limit the number of plant and workers that can work simultaneously on a task or on different tasks

• Nature of the work – it takes longer to place concrete in slender elements such
as columns, as compared with bases or slabs

• Climatic conditions – work is more sluggish early on cold Highveld winter mornings,
or in the heat of noon at mid-summer. In certain parts of the country strong winds can have a real impact on resources at certain times of the year (requiring for instance more workers than normal to safely carry items such as roof sheets or ceiling boards) The completed list could look as follows:
Activity No
010 020 030 040 050 060 070 080 090 100 110 120 130 140 150 160 170 180 190 200

Description
Setting out Excavate foundations Foundations Plinth Brick/Block work Plumbing -1st Fit Electrical - 1 Fit
st

Duration (days)
1 1 2 2 1 1 9 2 1 2 2 2 2 1 3 2 4 7(split) 1 1

Responsibility
Site foreman Specialist sub-contractors Specialist sub-contractors Brick layer Plumber Electrician Brick layer Brick layer Brick layer Carpenter Roofer Plasterer Plumber Electrician Plasterer/Painter Carpenter Various Various Various Site foreman

Brick/Block work Fitting of frames Fixing of ties Roof timbers Roofing Beam fill Plumbing 2nd Fix Electrical 2nd Fix Wall finishing Fitting doors & glass Finishing Inspectionss Connections Hand over

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Bars that represent the duration of activities or tasks are now drawn to scale on a chart:
ID Task Name
Task 1 Task 2 Task 3 Task 4 Task 5

Start

Finish

Duration
22 23

20 Nov
24 25 26 27 28

27 Nov
29 30 1 2 3 4 5 6

4 Dec
7 8 9 10 11 12

11 Dec
13 14 15 16

1 2 3 4 5

22 Nov 22 Nov 22 Nov 22 Nov 22 Nov

22 Nov 22 Nov 22 Nov 22 Nov 22 Nov

1d 1d 1d 1d 1d

Next, the bars are plotted in their correct positions on the horizontal time-scale, overlapping where appropriate:
ID Task Name Start Finish Duration 8 Jan 15 Jan 22 Jan 29 Jan
1 2 3 4 5 6 7

5 Feb
8 9

12 Feb
10 11 12 13 14 15 16 17 18 19 20

12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Setting out Excavate foundations Foundations Plinth Brick/ Block work Plumbing -1st Fit Electrical - 1st Fit Brick/Block work Fitting of frames Fixing of ties Roof timbers Roofing Beam fill Plumbing 2nd Fix Electrical 2nd Fix Wall finishing Fitting doors & glass Finishing Inspectionss Occupation certificate Hand over 12 Jan 12 Jan 12 Jan 16 Jan 18 Jan 18 Jan 19 Jan 25 Jan 26 Jan 30 Jan 1 Feb 3 Feb 7 Feb 8 Feb 8 Feb 13 Feb 12 Jan 12 Jan 13 Jan 17 Jan 18 Jan 18 Jan 27 Jan 26 Jan 26 Jan 31 Jan 2 Feb 4 Feb 8 Feb 9 Feb 13 Feb 14 Feb 1d 1d 2d 2d 1d 1d 1w 2d 2d 1d 2d 2d 2d 2d 2d 4d 2d

17 18 19 20

13 Feb 12 Jan 17 Feb 20 Feb

16 Feb 17 Feb 18 Feb 20 Feb

4d 5w 2d 1d 1d

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Line of balance (LOB) programming
LOB programming can be a useful tool for repetitive production processes such as multiple-unit house building. The principle is simple: subtract the time it takes to complete one unit from the total time available and divide the remaining time into the total number of units. This gives the rate at which units must be completed and handed over.

Example:
Eighty units must be completed in one year (48 working weeks). Eight weeks is subtracted for one complete unit. This leaves 40 weeks, and that divided into 80 units is 2 hand-overs per week. This information can be used to plan materials delivery and labour take-on. If, for instance, a bricklaying team (bricklayer and two helpers) can do all the brickwork on a unit in two weeks, then it can be calculated that four such teams will be needed on site for the bulk of the time to meet the required hand-over rate. The above is an average production rate, and in planning the work production rates for different trades may be staggered to produce orderly completion and hand-over in batches or phases. If an LOB calculation shows, for instance, that two glaziers are required all the time to produce two houses a week, it is better, rather than continuously glazing, to push ahead on the completed shells until, say, 12 houses are ready, and then to bring in six glaziers to finish all 12 in two days.

Network programming
Network programming includes methods such as Critical Path method (CPM), and Project Evaluation Review Technique (PERT). The basic principle underlying all of these is recognising the interdependence between activities, and the effects of delays in one activity on linked activities and the overall completion date immediately show up. Without the appropriate computer software programmes (for example Microsoft Project, Visio, or Primavera), network programming is a tedious and complex exercise. Some expertise and training in the use of the software, which cannot be imparted through a manual of this nature, are required.

A note on “fast tracking” the construction process
Deliverables from a phase are usually approved before work starts on the next phase. However, a subsequent phase is sometimes begun before the deliverables of the previous phase are approved. This practice of overlapping phases is called fast tracking, which adds to the risk. Fast tracking has been the cause of much unsatisfactory work on some projects. Project managers, in particular, tend to use this term to impress developers with what can be achieved by fast tracking. However, inserting unrealisable lead times in construction programmes in the interest of fast tracking has caused several disasters in recent years. Speed is seldom a worthwhile substitute for quality.

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Despite several advances in the chemical composition of a number of wet materials, concrete still needs a certain minimum number of days to achieve the desired design strengths. Props supporting formwork to slabs overhead cannot be summarily removed early because other trades wish to work on unencumbered floors, plaster needs to dry before painting, and screeds need to dry out before floor finishes can be laid. Structures move and change shape (shrink and settle) while drying out, and if windows are, for instance, built in hard up against the soffits of slabs before they have properly settled, the ongoing sagging may buckle frames and crack glass. Ceramic cladding tends to come adrift if applied too early or under unfavourable conditions. Shrinkages in exposed brickwork tend to vary seasonally, and this should be factored into any programme. On projects where several separate buildings are undertaken simultaneously, however, fast tracking is actually no more than common sense work planning as certain processes can be rotated on site, allowing the individual lead times of building materials to be achieved without delays in overall programming.

The figure below shows a generic project life cycle (there is also the so-called S-curve for expenditure on a project):
Cost and staffing level Initial phase

Intermediate phases Final phase

Start

Time

Finish

Cost and staffing levels are low at the start, higher towards the middle, and drop rapidly as the project draws to a conclusion. At the start of the project:

• the probability of successfully completing the project is the lowest • the risk and uncertainty is the highest • the ability of stakeholders to influence the final characteristics of the project
product is the highest The probability of success generally increases, while the ability of stakeholders to influence the final outcome of the project decreases, as the project progresses.

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Ensuring the essentials are in place
Check that all local authority approvals are in place
Before any construction commences, the entity must ensure that all town planning and building approvals have been complied with to the satisfaction of the Local Municipality. If this has not been done, serious fines and other legal problems and delays could be encountered. At completion, if plans have still not been approved, or the finished building has not been “passed” by the municipal inspectors, the municipality will not issue an occupation certificate. It is then illegal to occupy the building, and not only will fines be incurred, but there will be serious insurance implications for the owner should anything happen to either the building or the occupants. Permits are also required for demolition of old structures on the site, and after demolition clearance certificates, stating that the site is vermin-free, must be obtained. Permission to close off parts of streets and use pavements may sometimes have to be obtained on tight inner city sites (and deposits are then payable to cover any possible damage to paving and kerbs, parking meters and the like).

Check that you are working off latest drawings
Sets of construction drawings, finishing schedules and other contract documents are formally handed to the contractor, usually at the site hand-over meeting. A master set is held in safekeeping as part of the contract documents. The builder also receives a copy of the signed originals and of the approved building plans. The latter must be on site at all times for reference by inspecting authorities. Drawings must be stamped “For construction purposes”, and a drawing register must list all drawings received on site by date and number or revision number, so the architect and engineers can always check that the latest revisions of drawings are on site.

Check that insurances are in place
This is vital, and no one should be allowed to set foot on site if all the insurances are not in place. From site hand-over, the contractor is in control of the site, and responsible for everything that happens on it.
The basic insurances required are normally covered by a so-called Contractor’s All Risk (CAR) policy. This includes:

• Insurance of the “works”, covering loss or damage to materials on site and the
permanent structures due to theft, vandalism, accidents, weather, storms and floods, fire and the like

• Workmen’s compensation or death or injury of the contractor’s workers • Third party or public liability cover for death or injury to the person of, or damage
to the property of visitors to the site, passers-by and the general public

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Problems caused by political unrest are covered by policies issued by the South African Special Risks Insurance Association (SASRIA). In some instances, where deep excavations close to site boundaries are required (for example, basements, or cutting down levels on steep sites), and there is a potential danger of destabilising existing buildings on adjacent sites, it is necessary to take out Removal of Lateral Support insurance. In such cases it is also prudent to inspect adjacent buildings together with their owners, and note and take photographs of all existing cracks and subsidence to avoid arguments later. In addition the contractor must ensure that all his plant and equipment are adequately insured.

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e

Executing the work
Site layout and organisation
There is no standard site lay-out – each site is different and should be planned differently. The aim is to ensure optimum efficiency, economy and safety by looking at the implications of tidiness, accessibility and co-ordination. If the entity is not going to employ a professional site agent or construction manager (both of whom should know how to do this planning), it should at least obtain advice on this aspect. Go to another building site where such people are employed and ask them to help you. The following can be used as a checklist:

General guidelines
1. Draw up a plan or map of the site showing:

• Access and exit points for people and vehicles • Circulation of people, materials, machines and vehicles • Position of temporary service connections (water, drainage, electricity) • Position of permanent structures (buildings to be erected), and temporary
facilities such as stores, offices, ablutions, sleeping accommodation, fixed plant (for example, tower cranes and batching plants), and material stockpiles 2. Plan where to start with the work and the physical sequence of completion, keeping in mind:

• Minimising disturbing occupants of completed phases – no-one likes living on
a construction site

• Risk of damage to roads, services and buildings completed or partly
completed 3. Identify potential problem areas and plan how to deal with them, for example:

• Check low areas and impediments to run-off that could cause stormwater ponding
and possible flooding; grade portions of the site affected, and/or dig channels for run-off; or construct temporary earth berms or retaining walls out of sand bags

• Check for steep banks and unstable slopes that could collapse in heavy rain, or
when heavy vehicles and plant move nearby

• Check for weak points from a site security point of view, for example, hidden
corners or places of easy access from adjoining properties 4. The planning of site access and circulation should:

• Ensure ease of delivery of materials and avoid multiple handling • Consider probable size, mass and manoeuvrability of delivery trucks. In practice,
this often means that bulk materials stockpiles are close to the entrance to avoid heavy trucks damaging internal roads, services or buildings, while sheds for lighter materials are further “inland”

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• Ensure that heavy loads are not trucked over pipelines • Provide, if possible, two gates to enable one-way flow of traffic (this does however,
complicate site security)

• Make access and circulation routes as permanent and maintenance-free as
possible by proper compaction, grading for drainage and even hard-surfacing permanent roads early on (consider cost implications though, and keep in mind possible damage due to overloading beyond designed carrying capacity)

• Co-ordinate with traffic authorities with regard to temporary closing of streets
and/or pavements where necessary, and hoarding for the safety of people passing by 5. Positioning temporary site services and facilities, and fixed-position plant:

• Temporary service connections will usually be provided on the site boundary
in positions determined by the municipality. The temporary works linking up to the connections (pipes, taps, cables, distribution boards) are provided by the contractor, and positioning these must be co-ordinated for proximity to where they are needed most (for example, taps close to mixing platforms, distribution boards close to offices and temporary workshops)

• The supervisor’s (site agent’s or contracts manager’s) office should have an
optimum balance between best possible views of the whole site and isolation from dust, noise and disturbance

• Office for site meetings (and parking for attendees) if possible, should be out of
the way so as not to interfere with the works, or unnecessarily expose visitors and their cars to injury or damage

• Site accommodation for staff where required (not common in urban areas), must
ensure safe and healthy living conditions. Ablutions must not be too distant from the works otherwise productivity is compromised

• Fixed-position plant must be placed for optimum utility and minimum wastage
and re-positioning. Decisions must be made about central bulk concrete batching plants against smaller mobile mixers (economy and practicability), choice between cranes, hoists, ramps or conveyors for vertical movement of materials 6. Materials storage and handling:

• Multiple handling of materials wastes time and money, increases the risk of
breakage or damage, and makes loss control (keeping track of the materials) very difficult

• Storage method depends on:
• Durability – level of protection required against the elements (cement for instance, needs to be stored in waterproof sheds with good ventilation, whereas bricks can lie outside • Protection required against damage, for example, deformation of window frames when stacked incorrectly or white rust developing on roof sheets stacked tightly together out in the open • Protection required against loss and theft – certain materials are more valuable and easier to steal than others. Windows, doors, ironmongery and fittings, sanitary fittings, light fittings and the like must always be in locked stores

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Site boundary

Permanent structure (flats)

Temporary steel bridge for moving materials once ver tically hoisted Mechanical hoist

Permanent structure (flats) Materials stores & tool sheds (close to entrance & works) brick stockpile sand & stone stockpile Mixing & working area

One-way flow

Site agent’s office

Parking Guard hut

Permanent structure

Permanent structure (flats)

Ablutions

Site Boundary

In

Office site meetings Temporary service connections Street

Out Pavement

Illustration of site lay-out and establishment

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• Remember completed parts of buildings can be used for stores. Keep this in
mind when programming the construction sequence. A few lock-up garages, for instance, can be finished quite quickly and used for stores without disturbance

• Consider the following factors when placing stores and establishing a materials
handling system: • Optimum balance between ease of access for delivery and closeness to point of use • Proper control procedures for receipt and issue of materials and tools • Security – make sure stores cannot be breached unnoticed from the street or from adjoining open spaces. (In one case on a major Eastern Cape project a store was located on the boundary with its back wall forming part of the fence. The stores clerk duly cut a hatch in the wall and ran a profitable “sideline” from there.) • Design a flow diagram of stock movement and a delivery schedule to ensure enough materials on site at all times and to avoid bottlenecks and delays • Keep site tidy and regularly remove rubble to keep working and movement space clean • Establish gravity feeds whenever possible for bulk aggregates, cement (silos) and rubbish removal chutes in multi-storey buildings

Materials and equipment delivered to site

Receipt of

Handle
Offload

Final location in structure

Handle Handle Combine materials e.g. mix concrete Site pre-assembly at ground level

Store

Handle Site boundary

Cement ineffectively stored, should be stored in waterproofed sheds

Bricks delivered in pallets, placed close to its end use

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Materials supply and management
Before buying …
Select and draw up a list of materials that need to be purchased
A list is drawn up at estimating stage for the purpose of obtaining quotes. Because of time constraints, that list is often, however, incomplete, and estimating is done on the basis of past prices. A comprehensive list should, therefore, be compiled again as soon as practically possible. This serves as a checklist for planning the purchasing of materials, and ensuring that nothing is forgotten which causes delays. The types of materials and components that will be required are indicated in the specifications, on the drawings and finishing schedules, and in the bills of quantities – in that order of precedence. Where the type of material is not specified, or there is a discrepancy between any of the above documents, check with the specifier (usually the architect or engineer). Familiarise yourself with the content and meaning of specifications – especially generic or standard “preambles” which are not usually bound in with the tender or contract documents, and only included by reference. Always keep a copy of the latest edition of such standard preambles in the office, and ensure all staff involved in construction are familiar with it. The document in general use for building works in South Africa is the Standard Preambles for Building Works produced by, and available from, the Association of South African Quantity Surveyors in Midrand, Gauteng. Take cognisance of special prescriptions and specific brand names or product codes specified, and do not substitute these of your own accord. Where materials are not specifically named, try to select the best quality brand compatible with budget constraints. Remember cheap is not always bad, and expensive is not always good. Some main items where the make and source of supply are usually left to the discretion of the contractor include:

• Plaster bricks – Check not only price, but also quality. Excessive breakage and
waste due to crumbly bricks often costs more than paying slightly more for a harder brick and reliable supply

• Aggregates (sand and stone) – Again, poor quality in the form of dirty aggregates,
poorly graded sand, or excessively flaky stone can later result in extra costs because of repairs to cracking concrete and plaster, high cement demand in mixes etc. Where large quantities of structural concrete are required (walk-ups and high-rises), it is prudent to collect samples of aggregates from different sources in the area, and to get your nearest concrete laboratory to do mix designs that will give you the most cost-efficient proportions of cement and aggregates. Most of the major consulting engineering firms have such laboratories in the larger centres

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• Steel windows and door frames – This is a cut-throat business, with many players
entering and leaving all the time. Anyone with a shed and a welder can make windows, but the trueness of their jigs, the soundness of their welds, and the quality of hinges (brass pins preferred to mild steel) and fittings will determine the level of problems during installation and glazing, including potential future maintenance problems. Deal with suppliers who have a good reputation – there are enough of them around in all urban areas to ensure competitive pricing

• Roof and other timber – Timber sold commercially has its grade stamped on
the end of each length. When lengths are cut shorter in the shop, the grade stamp may be lost. Visual checking for defects at delivery is very important. Also ensure your supplier stores timber under a roof or otherwise protected against rain and sun

• Roof sheeting – Rolling profiled roof sheeting from coil (flat sheet produced by
the national producer of steel) is fairly straightforward and there should be no real problems with quality. Ensure that you buy the correct thickness or gauge. Off-the-shelf sheeting is often only 0.45 mm or even 0.35 mm thick these days (used on RDP housing), but it is not advisable to go less than 0.6 mm or 0.5 mm “Fullhard” for our purposes

• Cement – Making cement is a capital-intensive business, and consequently there
are no fly-by-nights in this industry. The only problem is price monopolies Read item descriptions and the standard preambles that apply to that particular type of item very carefully. Suppliers, especially those that cater for the general public on a cash and carry basis, usually stock the cheapest (and sometimes the “nastiest”) brands – often the result of import dumping. Many of these cheap brands do not comply with the specifications of formal building projects. This is especially true of items such as external batten doors, steel door frames and windows, door locks and general ironmongery, roof sheeting, taps and mixers, light fittings and paint products. Pressed steel door frames are often of the so-called “knock-down” type, made of very thin material, and with very flimsily assembled corners. The furniture on steel windows (handles and stays) is usually of poor quality unless a better quality is specifically called for, and although it may seem like a small thing, experience shows that one of the most common complaints from occupants of low-cost houses is that windows won’t close properly because of poor quality fittings. In other instances, the standard stock carried by suppliers is perfectly good for its intended purpose, but not of a high enough standard for quality housing. An example is where a project specification calls for 6 mm thick panels on the back of flush-back wooden doors (more resistant to puncturing by children or vandals), whereas the standard product on most shelves only has a 3 mm or maybe a 4 mm-thick panel.

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Determine the quantities of materials needed
A warning about bills of quantities
On projects where an external quantity surveyor has provided bills of quantities, the quantities are used to ask suppliers to reserve approximate quantities of bulk items such as bricks, cement and aggregates, but final orders to purchase should never be based on such bills of quantities. The contractor should always do his own count and measure off the most up-to-date drawings issued for construction purposes before ordering. There could have been changes on the drawings between the time the quantity surveyor measured for the bills, and the issuing of construction drawings. Also remember that when quantity surveyors compile bills of quantities, they measure off the net sizes as shown on the drawings, and it is up to the contractor to make allowances for waste and other causes of shrinkage as set out below.

Quantifying by counting
Some components such as windows have an exact number and are easily quantifiable by means of simple counting. Check numbers given on window schedules against the layout plans and clear up any discrepancies before ordering. Also check the windows as pictured on the schedules and/or elevations against the product codes and sizes in standard window catalogues available from most suppliers. Ensure where windows have opening sections on one side only, that the correct “hand” is stipulated.
opening sash hinges fixed sash opening sash opening to right

fixed sash

• plan

• right-hand opening

• elevation facing window from outside

Remember door frames are left or right “hand”. When facing the frame standing on the side towards which the door will open, the hand is indicated by the side of the frame the hinges are on. For so-called “French doors” you must also indicate whether the door is opening out or in, as the hinges will be different. Pressed steel door frames are made 50mm longer than final door size. This is to allow for the bottom of the frame to be embedded in the floor screed or topping. Where the concrete surface bed or floor slab is simply going to be floated smooth, without any further screed, a special “no-screed” frame which is shorter must be ordered otherwise there will be a large gap between the bottom of the door and the floor surface.

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hinges

hinges

hinges

• Left hand door ood d rframe nah thgiR • emarf

• Right hand door frame

• Left-hand

hinges

• Right-hand

• Plan
• Elevations facing doors on side where hinges are

Pressed steel door frames have hinges welded on and are supplied with lock striking plates. Timber door frames come bare, and hinges and striking plates must be purchased separately.

Quantifying by measuring and calculating
Some materials cannot be quantified by simple counting. The amount of concrete in foundations for instance, must be measured off the drawings first. If readymixed concrete is going to be used, this measured quantity (in cubic metres) plus an appropriate allowance for waste can then be used for ordering the concrete. If concrete is going to be mixed on site, however, the number of cubic metres of concrete as measured off the drawings will be the “net” (without allowance for waste) minimum quantity of finished product required in accordance with the design (drawings). This quantity of finished concrete must be broken down into its constituent parts (cement, sand, stone and water) in the correct ratios, as indicated by the specified mix proportions. A specified mix proportion of 1:4:5 for concrete means that, measured by volume, the concrete should consist of one part cement, four parts fine aggregate (sand or crusher run) and five parts coarse aggregate (broken stone or gravel). It does not mean – as many small builders mistakenly believe – one bag of cement to four wheelbarrows of sand and five wheelbarrows of stone. The relative quantities for the above mix will therefore, be calculated as follows:

• Cement – 1/10th of total volume • Sand – 4/10ths of total volume • Stone – 5/10ths of total volume
Likewise, a mortar mix of 1:5 means one part by volume cement and five parts sand, calculated as follows:

• Cement – 1/6th of total volume • Sand – 5/6ths of total volume

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It is convenient to remember that a concrete wheelbarrow carries a volume of 67 litres (0.067m3), and that a 50 kg bag of cement has a volume of 33 litres (0.033m3). Two bags of cement, therefore, fill a wheelbarrow, and 15 wheelbarrows make a cubic metre. This information can be used for simplified gauging and mixing instructions on site. So, if one cubic metre of 1:4:5 concrete is required, then the quantities would be as follows:

• Cement – 1/10th of 1m3 = 100 litres or 3 bags of cement (100/33) • Sand – 4/10ths of 1m3 = 400 litres or 6 wheelbarrows (400/67) • Stone – 5/10ths of 1m3 = 500 litres or 7.5 wheelbarrows (500/67)
However, the above quantities would yield less than a cubic metre of mixed concrete, and we have to make some extra allowances first.

Allowing for bulking, lapping and waste
In estimating and pricing we make percentage allowances in our rates for bulking, lapping and wastage of materials. When ordering materials, those allowances must be converted into actual quantities so that enough materials can be ordered to complete the work.

Bulking and void filling by aggregates (Shrinkage in volume from dry materials to wet mixes)
Materials such as sand used as aggregate in concrete and mortar will always arrive on site in “bulked” form. This means the sand will have a loose “fluffed-out” structure with lots of air between the grains. This is caused by moisture in the sand that creates surface tension on the individual grains, and forces them slightly apart. When water is added in the mixing process this structure collapses as air is forced out, and the moisture that came with the sand joins the mixing water. The delivered quantity of sand will have an apparent volume as measured by the capacity of the delivery truck (say 6 m3), but in reality, up to 25% of that is air, meaning that effectively there is only 6 x 100/125 = 4.8m3 of actual sand. When the cement, sand and stone are mixed together, the smaller particles (cement and sand) fill the voids between the larger ones (stone), causing the total mixed volume to be less than the sum of the volumes of the separate materials brought to the mix. To make up for the combined effect of bulking and void filling, one would have to order up to 50% more cement, sand and stone than the theoretical quantities, i.e. for 1 m3 of 1:4:5 concrete as in the example above, one would have to order (and mix) the following actual quantities:

• Cement – 100 litres x 1.5 = 150 litres or 4.54 bags • Sand – 400 litres x 1.5 = 600 litres or 0.6m3 • Stone – 500 litres x 1.5 = 750 litres or 0.75m3

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Lapping of materials
For certain materials there are prescribed laps at end or side joints, for example roof sheets. A standard profiled galvanised roof sheet such as IBR or “S-rib” (corrugated sheeting) is 762 mm or 914 mm wide, but with the prescribed side lap the effective cover width would only be 686 mm or 838 mm. Lapping also applies to damp proofing membranes in walls and under floors, brick reinforcement, concrete roof tiles, and any other material that needs to be sealed for waterproofing purposes.

Waste
“Waste” is the loss of material that cannot be re-used. Waste usually taking place during delivery, handling, processing and fixing in the building. Waste is caused by spilling of materials such as during the transportation and placing of concrete; mortar droppings during bricklaying; the application and subsequent smoothing of plaster; cutting bricks, tiles, roof sheets and ceiling boards to fit; and off-cuts from standard purchased lengths when cutting timber to design lengths. A certain unavoidable amount of breakage also occurs during delivery and off-loading of bricks, although with bricks most commonly being delivered in pallets, this problem has been reduced considerably. Waste is sometimes inherent in the process (unavoidable but manageable) and not always obvious. Many items of work have specified nominal or net minimum dimensions, and we have to make allowance for certain tolerances in the finished product. In the plastering of a wall, for instance, one must allow for the extra material needed to maintain the minimum specified thickness across unevenness in the rough built surface of the wall. The average thickness of plaster could be well in excess of the specified minimum 12 mm – as much as double that depending on how rough the bricklayers were, and how unevenly shaped the bricks were. It would be prudent to work on a thickness of 25 mm. To convert the measured square metres of plaster surface area to the amount of mortar required in cubic metres, we would multiply the area by 0.025 rather than by 0.012. The above would apply wherever material of a certain specified thickness is applied to a potentially uneven base, such as floor screeds on concrete surface beds (allow 40 mm thickness for a specified 22 mm to 25mm screed), and concrete against excavated or backfilled earth. During the excavation of foundations in earth, so-called “overbreak” (due to removal of loose stones and soft soil) and partial collapse of sides always occurs, resulting in the need to pour an extra amount of concrete to fill the voids. In clean, stiff soil (free of pebbles, roots and boulders), an allowance of around 2.5% should be enough, but in stony soil, that allowance may have to be increased to 5% or even 10%. The percentage to allow for waste on different types of materials depends on many factors such as the quality of supervision and waste management in the organisation, training and discipline of site personnel, methods of storage, transportation on site and handling, and the nature of the works and the site. There will be more spillage of concrete and mortar, for instance, during transportation by wheelbarrow on steeper slopes than on flat ones.

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The following list of waste factors can be viewed as a guide:
Material item/component
Concrete in foundations Concrete surface beds Concrete slabs, columns and beams Reinforcing mesh in floors and slabs Brick reinforcement DPC in floors DPC in walls Quarry tile or cement cills Fibre-cement cills Timber in brandering for ceilings, roof purlins, tile battens and trusses made on site Roof sheeting Skirtings Ceiling boards Wall tiling Floor tiling Vinyl flooring and carpet tiles

Waste factor
2.5–5% (5-10% in loose or stony soil) Add 10-15 mm to specified thickness to allow for uneven base and add 2.5% for spillage 2.5% 12% for large areas, 20% for small areas 3.5% 5% large areas, 10% small areas 3.5% 10% 5% Compile actual cutting lists and add 5-10% Calculate the number of different actual lengths required and then add 5% for cutting and waste 5-10% Compile actual cutting list and add 2.5-5% 10-15% 5-10% 5-10%

Materials not shown on the drawings
Part of the finished product, but not usually found in descriptions or shown on drawings, are the many types of fasteners used in assembling a building – nails, screws, bolts, roofing screws, plugs, nail plugs and anchor bolts, wire, hoop iron, brackets and connector plates, adhesives, tile grout, cement slurry or patent products used to provide key or grip between concrete and plaster, etc.

Consumables
Materials meant for permanent inclusion in the finished product are shown on the drawings or are described in the specifications and bills of quantities. Certain “materials” however, are classed as consumables, and are not shown on any contract documents. The contractor still must estimate their quantities for inclusion in the estimate or budget, and because they have to be purchased as well. Some examples are:

• Sanding paper, thinners, brushes that are used up in painting operations • Drill bits, angle grinder cutting discs and saw blades used up on the project • Plastic spacers for wall and floor tiling • Cleaning materials such as “Mortalift” used for cleaning mortar splashes off
face-brick work and tiling, cloth and detergents used for general cleaning of the works

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Experience will teach what allowances to make for these – in the meantime speak to painters, carpenters and others who do the work to get an idea.

Materials list or schedule of materials
The above can be used to draw up basic guidelines for determining quantities of materials, namely: 1. Measure quantities of items of “wet” work in normal units of measurement (m2 for brick walls, plastering, tiling; m3 for concrete) 2. Convert the measured quantity of work into an appropriate format for further processing, for example, plaster from m2 of surface area into m3 of mortar that needs to be mixed (Remember the allowances for tolerances) 3. Break composite items down into their constituent parts according to prescribed mix proportions, i.e. concrete into cement, sand and stone; and mortar into cement and sand (remember bulking and void filling) 4. Draw up actual cutting lists for materials such as roof timber, roof sheeting and ceiling boards 5. Make allowances for waste and lapping 6. Count exact number of components such as doors, windows, locks, baths, taps and the like (you cannot allow waste for these – every single one purchased must be accounted for, and replaced out of own funds or insurance payouts when lost or damaged) 7. Convert quantities into units of purchasing where necessary, for instance, cement from m3 into 50 kg bags or tonnes when bought in bulk, nails, wire and bolts from number or m into kg At the end of the quantifying process described above, we will have a schedule of materials, including cutting lists which can be used for pricing and ordering purposes. The units in which materials are purchased, and in which they should be furnished in a list of materials, are as follows:
Item
Sand and stone

Unit
Truck loads of 5 m3, 5.5 m3, 6 m3 or 10 m3 for larger quantities, or by cubic metre for smaller quantities. (The rate per m3 for smaller than standard tipper truck loads is quite high because of proportionately higher loading and transport costs) 50 kg bags for smaller projects or projects done in phases. Tonnes for larger projects where the cement is delivered to site and stored in bulk in metal silos. To convert divide the m3 of cement calculated by 0.033 to give number of bags, and then divide by 20 to give tonnes (Remember 50 kg of cement is 33 litres or 0.033m3 by volume) In loads of multiples of 1 000 (usually 3 000, 5 000 or 10 000), or in multiples of standard pallet sizes for smaller quantities (again more expensive) Different widths (110 mm, 220 mm, 340 mm) in rolls of 40 m In 20 m rolls in widths of 1 m, 2 m, 3 m, 4 m and 6 m. (Remember allowing for side laps and jointing tape in 40 m rolls) In 20 m rolls or strips of 3 m length in widths of 75 mm and 150 mm (strips usually more expensive) In standard lengths from 900 mm to 6.6 m in increments of 300 mm In kg. Standard roll is 50 kg, but can be cut to exact quantity required. 3 mm Wire = approx. 16m/kg; 4 mm = 10m/kg In lengths corresponding to standard steel window sizes (for example, 533 mm, 1,022 mm, 1,511 mm)

Cement

Bricks DPC for walls DPC membrane for under floors, roofs Brick reinforcement Pre-cast concrete lintels Galvanised steel wire (for roof ties) Fibre cement window cills

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Quarry tiles or cement cill tiles Reinforcing steel Roof timber Timber is bought “sawn” (no planning), or wrought/wrot (planed) on one, two, three or all sides. When planed on all sides we talk of P .A.R. (planed all round) timber. Wrought and/or splay cut ends of truss rafters can be done in the shop (at a fee) or on site Timber for finishing and joinery (skirtings, rails, cornices, cover strips) Nails Bolts, nuts and washers Galvanised steel plate connectors, “hurricane” clips, truss hangers, etc. for roofs Roof sheeting Roofing screws Concrete roof tiles

In number In lengths for different types and diameters usually cut and bent in the shop according to engineer’s bending schedule 1. In standard lengths (cut to required actual length on site), usually starting from 2.4 m or 3m in 300 mm increments up to 6.6 m (finger jointed for longer lengths and more expensive). The longer the length the higher the price per m, and the more the potential for waste due to warping and other defects Or Cut to exact lengths from standard lengths in shop according to cutting list (timber merchants will often draw up the cutting list for you from the drawings as a service). Remember that you pay for off-cuts anyway, and that this option allows very little tolerance for buildings not being built exactly to designed sizes on site

In lengths usually from around 1.8 m up to 4.8 m in increments of 300 mm. Remember steel cut nails or plugs and screws for fixing, and panel pins for laying on quarter round beads and the like In kg. Most economical is boxes of 25 kg, but smaller quantities can be bought. Most hardware and DIY stores sell pre-packed packets of 10, 20, 50 or 100 nails counted off, but this is usually more expensive In kg or in number In number

Usually charged per m, and comes in standard lengths from around 1.8 m up to 13 m in increments of 300 mm (Remember effective cover width - allowing for side laps, and end laps where not in single length) Boxes of 100 and 200 In number. (Standard roof tile including allowance for waste is approximately 10.5 to 11 tiles per m2 depending on slope or pitch.) Best to get hold of manufacturer’s catalogue and technical guide – these have useful information on calculating quantities, as well as laying instructions In number by type, according to standard catalogue reference, or by providing supplier with a copy of the architect’s window schedule for purpose-made windows. Remember to specify the “hands” for opening sections, type and quality of window furniture (handles, stays), and the burglar proofing. If windows are ordered from a specialist window manufacturer (recommended), the windows are delivered to site without furniture (to avoid damage and theft), and “serviced” just before glazing commences when the supplier comes out to site and fits and adjusts the furniture to the frames

Windows

Pressed steel door frames Wooden door frames Ceiling boards

In number by size of door and width of frame (for half-brick or one-brick wall). Remember “hands”, “no-screed” frames In number. Remember to order separately hinges, lock striking plates, anchoring lugs and wood primer for the back Gypsum board in 6.4 mm thickness. Boards in 900 mm and 1,200 mm widths, and lengths from 1.8 m to 4.8m in 300 mm increments. Fibre cement (for kitchens, bathrooms and outside) in 4 mm and 6 mm thickness. Jointing strips and cornices in various lengths, but 3 m is most common In number stating size of pane, thickness and type according to the window schedule. Remember SABS codes that require safety glass in glass panel doors and window panes over a certain size In number. Check what comes with screws, plugs for fixing

Glass for windows

Ironmongery and finishing (door locks, toilet paper holders, towel rails, curtain rails) Ceramic wall and floor tiles Flooring

Usually in boxes of 1 m2, 1.5 m2 or 2m2. Remember spacers, tile adhesive in 20 kg pockets (approx. 4m2/pocket cover rate), tile grout in packets of 1,5 kg or 20 kg Carpeting: Tiles of 500x500 mm in boxes of 2 m2 fixed with adhesive, or rolls 2.75 m wide fixed with tack strips (usually on supply and fit basis by specialist sub-contractors) Vinyl flooring: Tiles in boxes of 1 m2 or rolls 1 m wide. Remember adhesive, skirtings, stair nosings, edge strips. Uneven floors need to be made level and smooth first with a self-levelling screed such as “Pavelite” There are a myriad fittings and bits and pieces to buy, and it is best to sit down with the plumber or the sales/ technical person at the specialist shop to work out quantities. Remember consumables such as hemp, thread tape, putty, PVC glue, solder, river sand for bedding of sewer pipes, and holder bats for fixing pipes to walls As plumbing above Fencing (m), paving (m2), pre-cast walling (m), grassing (m2) usually done by supply-and-fit specialists, otherwise same principles as above apply. Remember concrete for fence-post bases, bitumen paint for underground portions of steel fence posts, and aluminium paint for above ground

Plumbing and drainage

Electrical installation External work

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Getting the right price – shopping around
The first decision to be made is whether to always price all materials on each new project from scratch, or whether to negotiate fixed prices for certain basic and regularly used materials with one or more suppliers valid for a period of, say, three to six months. If one builds one project at a time, the first option is the right one. If one is constantly busy with many small projects such as individual dwellings, it is more practical to agree fixed prices for generic items such as cement, brick reinforcement, damp course, lintels, standard sanitary fittings and ironmongery and roof sheeting, regardless of which project they are meant for. Orders are then automatically priced at the agreed price until new prices are negotiated in bulk. The latter approach usually requires big buying power and sharp negotiating skills to be successful. There is also the risk of losing out on special offers and discounts on selected products that come along from time to time, because one does not take the time to shop around and keep an eye on the market. Regardless of the approach, never accept the first price that comes along. Always shop around and negotiate wherever possible. Remember off-the-shelf prices usually include a general cost allowance for delivery within a certain radius. If you are collecting the materials yourself, see if you can negotiate a further discount of around 2.5% to 5%.

Choose reliable suppliers
You will find that certain suppliers consistently beat the others on price, service and quality. It is good to build relationships with such suppliers, but never let them think they have you safely “in the bag”. Always keep them on their toes by keeping an eye on the market and letting them know when they are slipping or taking a chance with you. Suppliers are chosen on the following criteria:

• Price, discounts and payment terms • Prompt and efficient service • Ability to deliver on time • The ability to source material from elsewhere (in the event of running out of
stock) at the same price quoted

• After-sales service and technical resources for proper advice and servicing

The procedure for buying, and then managing the materials supply chain
Orders are placed on the basis of the prepared schedule of materials described above, or in the case of additional materials required due to underestimating or shrinkage, on the basis of properly motivated requisitions, approved at the appropriate level within the company.

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The procedure is as follows: 1. Write out by hand or produce computer-generated orders to the selected suppliers for the supply of the materials Remember that a purchase order is an offer to purchase and when accepted by the supplier (usually tacitly by means of actual delivery) constitutes a legally binding contract. It is, therefore, important that orders are correctly written out in all respects, and that they cover all aspects of the deal. Purchase orders should: • be written or typed on pre-printed company stationery (in the form of computer printouts or a bound book with carbonised tear-out copies) • have sequential serial numbers to avoid fraud and duplication

and clearly state the: • description, quantity and price of the items purchased • applicable discounts (especially settlement discounts) • delivery address and schedule of deliveries (quantities and dates), or where quantities and dates are still uncertain, a note stating that the supplier must await instructions for release, with an indication of the first expected release • payment terms

Many contractors make use of computer software packages that link the generation of purchase orders to the original estimates. Such a programme will not allow the generation of orders that exceed the estimated or budgeted quantities and/or prices, unless approved by a senior person with the necessary powers of authorisation. The original is sent to the supplier (even if first faxed). Copies depend on the organisation’s internal administration system, but should at least include a copy to: • file (admin office) • send to the site (usually with prices blanked out because that is confidential information) • send to the contract quantity surveyor if not based at head office

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Put the name of your entity here Purchase Order
Supplier: Order no: Please supply in good condition the following items: Qty Description Cost (Rand) Deliver to Delivery date Stand no: Date:

All materials to be supplied to specification. Any variation to materials described and ordered to be authorised prior to delivery. All costs include delivery and VAT.

Requested by : Print name Authorised by : Print name Signature Signature

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2. Plan release of orders (delivery schedules) with production team This is done in all cases, but is especially important on tight inner city sites where space is limited. Do not get materials delivered to site too soon. Risks of this include increased likelihood of damage, multiple handling due to limited storage space, rusting, for example, steel reinforcing, windows, and white rust on galvanised roof sheets stacked on top of each other. An example is where one places the order for the total number of bricks required (to get best price and ensure your requirement is reserved by the supplier), but advise the supplier to deliver only, say, 10 000 bricks every third day starting on a particular date. 3. Receive and control (check physical goods vs. delivery note) It is important that a competent person takes receipt of deliveries to site, and that he or she is trained to thoroughly check the physical goods against what is contained in the delivery note, to ensure: • The correct quantity as stated on the note is delivered. Short deliveries are noted on both contractor and supplier copies of the delivery note • There is no damage to the goods (and contamination of aggregates by excessive organic material). Damaged goods are sent back and a note to that effect is made on both the contractor and supplier copies of the delivery note. Also check for excessive breakage of bricks, and do not accept the broken bricks if there are too many (say more than 2% of total load) – remember you will have to cart it off site as rubble at your own cost later if you do not force the supplier to take it back at the time of delivery The off-loading process must be supervised, and the delivery note should only be signed once this person is satisfied that no further damage occurred during off-loading. Signed delivery notes must be carefully looked after on site and sent to the office for filing and further processing on a daily basis. 4. Storage, issuing and handling of materials on site Storage facilities must be: • be of a nature that ensures materials are safe and protected • be planned for minimum handling • have easy access • If materials are delivered to the central yard first, and distributed from there to individual sites, the following aspects should receive special attention: • Issue and control • Safe moving of material 5. Before paying For all materials supplied, the supplier must provide you with the following paperwork: • Written quotation (before ordering) • Delivery note

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Put the name of your entity here Receipt of materials
Supplier: Supplier invoice No.: Date: Stand no: Our order No.: Time:

The following items have been received in good condition and order: Qty on order Qty supplied Description of items and remarks Under/over supply


Materials stored in yard/store room on site. Materials stored at stand no. receipt of which is signed for by the owner

(By signing for the receipt of these materials the owner accepts the responsibility of safe guarding the materials against theft or damage)

Materials inspected by: Print name Materials inspected by: Print name Signature Signature

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• Priced invoice for each load or batch of loads • Consolidated statement summarising all invoices for the month (usually for all supplies up to the 25th day of the month) Payment is made according to the statement, but before paying, the following steps must be taken: • Reconcile all invoices with original quote, and the written purchase orders, to check that materials of the correct type and quantity, and at the right price are being charged for as quoted and ordered • Reconcile all invoices with delivery notes to ensure that the materials charged have actually been delivered, and pick up any notes on damaged and returned goods, and short deliveries. Check further delivery notes to see if the shortfalls were rectified, and if not, adjust the invoices accordingly • Reconcile the statement with the invoices in the batch, make adjustments as necessary and check that all agreed settlement and other discounts have been allowed Sometimes a problem with materials delivered is not picked up during delivery, and not, therefore, noted on the delivery slip. A more qualified or senior person may only later notice that the wrong or damaged materials were delivered. The supplier is then notified, the goods are returned, and if not immediately replaced, a credit note must be issued. Ensure credit notes are claimed and payment received, or adjustment made to invoices and statements before paying. 6. Follow-up Progressing File outstanding requisitions or release orders in delivery date sequence so that each morning deliveries due can be noted, and action taken if they have not been received by the afternoon. Re-file in revised order of promises and keep monitoring.
Materials progressing record
Material: Plaster bricks Supplier: Very good bricks Deliveries due according to release schedule: 15 Jan – 10 000 18 Jan – 20 000 25 Jan – 10 000 Total due 40 000 Enquiry date Results First 10 000: 10 000 Promised 17 Jan 4 000 Promised 18 Jan Deliveries Date 17 Jan 19 Jan Qty 6 000 4 000 Left 4 000 0 Order no. P3/016 Quote ref: P3/BKS/VGB Date: 27 Nov Date: 18 Nov

16 Jan 17 Jan

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Monthly reconciliation of deliveries, stocks and usage
Deliveries, stocks and usage of basic bulk materials such as aggregates, bricks and cement should be reconciled regularly so that production is not affected. The reconciliation also serves as a check on losses and waste. At a certain stage, for instance, the brickwork is measured as being 60% complete, therefore, say, 60 000 bricks should have been used. A check on deliveries shows that 80 000 bricks have been delivered during the month, so there should be 20 000 bricks in stock. However, a stock count reveals only 14 000 bricks on site (remember that some bricks may be at different parts of the works already ready for the bricklayers, so check the whole site – not only the stockpile). In the tender, provision was made for 5% waste on brickwork, meaning that a maximum of 63 000 bricks (60 000 plus 5%) should have been used. The reconciliation shows an actual shrinkage of 6 000 bricks or 10%. A total of 3 000 bricks are unaccounted for and the cause of this should be investigated. A first rough check should be to look around the site to see if there are unusually large piles of broken bricks and rubble lying around. If observation and checking reveal no obvious signs of excessive breakage during off-loading, or wastage on site, then you should keep a closer watch on delivered quantities through periodic spot counts. Drivers (and transport sub-contractors) often run side operations where some of the materials intended for your side end up being sold along the way. Fortunately, reliable suppliers these days often keep track of the movements of their delivery vehicles through tight control of driver logs or even satellite tracking.

• In the tables below, the actual quantity used is the total of the opening stock
and deliveries for the month minus the closing stock, and the shrinkage is the difference between the actual quantity used, and the theoretical quantity that should have been used as per the measurement (there is already some cement on site when brickwork starts – left over from concrete work).

Month 1:
Monthly reconciliation of materials stocks: Date: 25 March
Material Plaster bricks (number) Cement (number) Building sand m3 Quantity used per measurement 60 000 360 42 Opening stock 0 200 0 Deliveries during month 80 000 200 60 Closing stock 14 000 20 15 Actual quantity used 66 000 380 45 % Waste 10% 5.5% 7.1%

Month 2:
Monthly reconciliation of materials stocks: Date: 25 April
Material Plaster bricks Cement Building sand m3 Quantity used per measurement 20 000 120 14 Opening stock 14 000 20 15 Deliveries during month 10 000 200 18 Closing stock 2 000 90 18 Actual quantity used 22 000 130 15 % Waste 10% 8.3% 7.1%

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Month 3:
Monthly reconciliation of materials stocks: Date: 25 May
Material Plaster bricks Cement Building sand m3 Quantity used per Measurement 20 000 120 14 Opening stock 2 000 90 18 Deliveries uring month 20 000 200 0 Closing stock 1 000 160 3 Actual quantity used 21 000 130 15 % Waste 5% 8.3% 7.1%

A running tally of the above would show the total cumulative usage and waste figures at the end of each month, as well as upon completion of brickwork at the end of Month 3, for example:

Cumulative table at end of Month 3:
Monthly reconciliation of materials stocks: Date: 25 June
Material Plaster bricks Cement no. Building sand m3 Quantity used per Measurement 100 000 600 70 Opening stock 0 200 0 Total Deliveries to date 110 000 600 78 Closing stock 1 000 160 3 Actual quantity used 109 000 640 75 % Waste Total 9.0% 6.7% 7.1%

Management of labour
There are basically four types of labour on a construction site: 1. Permanently employed registered workers who receive a regular wage or salary, and a range of benefits such as leave, medical aid, UIF registration, insurances, bonuses and trade union membership 2. Contract workers who are employed for a specific period of time, or for the duration of a contract 3. Task-based (“piece work”) workers who are employed to perform a certain piece of work (for example, excavate the foundations for one house) for an agreed and set amount of pay 4. “Casual” workers who are hired on a daily or weekly basis, and usually receive no other benefits than their agreed daily wage. Casuals are recruited by putting up signs advertising work at the site, or by driving to spots in the city where they are known to congregate in the hope of getting picked up (usually near large building supply stores in areas where a lot of new development and construction is taking place) The issue of casual labour is a contentious one because exploitation and insecurity are rife in the construction industry. This is due to the fluctuating demand for labour on construction projects, and the fact that there are people desperate for employment. If employing casual labour is unavoidable, it is up to the conscience of the individual entity acting as employer of such labour to treat workers as fairly as possible Not being an ongoing contracting business in the conventional sense, the entity will work almost exclusively with sub-contractors and temporary construction teams, and will have very few if any individual workers in its employ. It may wish, however, to assist its sub-contractors in good labour management, through advice, training, and setting contract conditions for the treatment of workers.

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Managing labour on site involves the following aspects:

• Fair and equitable treatment and management of labour relations within the
framework of the law and the principles contained in the Constitution

• Fair pay for the job • Cultivating and maintaining loyalty, discipline and productivity – this implies the
provision of training and mentoring, incentive schemes, clear procedures and rules for activities and conduct on site, including appropriate disciplinary procedures, and inspirational leadership at all levels of supervision and management

• Promoting health and safety for workers on site • Clear agreements on targets and outputs, and remuneration and benefits • Efficient wage administration – correct processing of wages due, regular and
timeous payment

• Providing good supervision (firm, but fair) • Assigning clear responsibilities to supervisors, in line with their experience and
ability, and giving them authority equal to their responsibility

• Allocating a manageable number of workers per supervisor • Establishing reporting systems • Organising the workforce at all levels into effective and manageable units, and
ensuring that everyone knows where they fit in Some of the functions of supervision on site are to:

• Motivate workers to work efficiently • Give workers clear instructions, and monitor that these are carried out correctly • Ensure acceptable and agreed standards of quality and workmanship • Ensure that health and safety measures are adhered to • Maintain a sense of urgency, and high activity levels on site • Measure and record outputs (productivity) • Provide someone on site that workers can report to, or lodge complaints and
grievances to Supervision can take place at different levels:

• Gang leaders supervise teams of workers • Foremen or section foremen supervise gang leaders • Site agents/managers supervise foremen • Contracts managers supervise site agents
Note: Payment of wages or salaries Having cash in transit or on site should be avoided. The risk of being robbed is very high. Criminals hang around branches of banks where they know large cash withdrawals are made for wage payments, and follow people to site or to a convenient place for an ambush. All workers should be assisted to open a bank account, and payments should be made electronically by funds transfer. Allow time for transfers to go through, and on payday give workers enough time to make cash withdrawals before close of business, or before going home to areas where there may not be ATMs.

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Management of plant, tools and equipment
Equipment used on building sites is usually divided into two distinct categories:

• Tools – small hand-held equipment such as trowels, spirit levels, hammers, tilecutters, picks and shovels, and the many types of power tools such as drills, angle grinders, belt sanders and planes

• Plant – larger items (usually with an “operator”) such as concrete mixers, dump
trucks, mechanical excavators and loaders, mechanical hoists and tower cranes, and constructional aids such as formwork and scaffolding The distinction between these types of equipment is important as it affects the contractor’s bookkeeping and accounting, and is used in pricing for tenders, resource allocation and planning for execution. Expensive pieces of large plant on a site need to be kept busy continuously with minimum idle time to justify the high rental charges or high annual costs, if owned (depreciation, finance charges, insurance premiums, and licensing fees). If the entity has its own core team of workers doing basic jobs such as digging and concreting foundations, it will need its own equipment, such as:

• Picks and shovels • Wheelbarrows • Straight-edges, hammers, levelling pegs and spirit levels (for levelling concrete) • Pliers, screw-drivers, saws, and spanners and wrenches • Trowels and floats • A power drill and angle grinder • Profiles and gauging rods, building lines • A surveying tool such as a “dumpy level” • A good quality water hose (say 20 mm x 30 m)
Some of the above can be sold off to workers or sub-contractors and/or used by maintenance departments after completion of construction activities. All tools and equipment owned by the entity must be listed on a register, and a stock count held regularly (especially after completion of each contract). A separate daily register of tools booked out and received back must be held for each site. The registers must also note the condition of equipment when booked out, and when booked back in again. In addition, maintenance and servicing plans and schedules, and service logs, should be kept for larger pieces of equipment and all tools and plant that are operated mechanically. The working life of equipment depends on factors such as:

• Temperatures in which they operate (cold starts of machines with internal
combustion engines on winter mornings increase wear and tear of engine parts, and the consumption of lubricants)

• Dusty conditions on site that increase abrasion of moving parts

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Put the name of your entity here Issue of tools/equipment on loan
Sub-contractor: Date: Stand no: Time:

The following items have been received by the sub-contractor, in good condition and working order, specifically on loan for a limited time period. Ownership of these goods remains that of the entity:

Qty

Description

Condition

Due return date

Any damage (excluding fair ware and tear) or non return of these goods will be for the account of the contractor, who hereby agrees that the cost of repair/replacement will be deducted from any payment due to him by the entity. Goods received by the: sub-contractor Print name Signature

For the entity: Print name Signature

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• Regular cleaning, lubrication and servicing • The care with which they are used – avoiding overheating of power tools and
engine-driven plant Workers must be trained to feel responsible for equipment, to clean equipment straight after use, and maintain and oil equipment regularly. It is a good idea to appoint one person to take overall responsibility for accounting for all equipment used by a team every day, and to make sure the others comply. Skilled workers and artisans such as bricklayers, plasterers, carpenters, tilers and plumbers (including sub-contractors) should have their own personal tools. This will ensure they will look after these expensive pieces of equipment. Unless the entity is going to be building continuously for some time, it is usually more cost-effective and less troublesome to hire larger items of plant as and when needed, rather than to own them. However, if you are going to do a lot of building it is practical to invest in items such as:

• A small concrete mixer that can be easily moved around on site, or between
sites on the back of a bakkie

• Hand-held pneumatic compactors (for example, a Wacker) or a small mechanical
roller or plate compactor (for example, a Bomag)

• A basic set of scaffolding frames and boards, and props • A brick cutter • Control sheet for issuing tools and equipment on loan to sub-contractors

Managing sub-contractors
General
When planning the execution of the works, a resource allocation is done in conjunction with a complete list of activities or operations on the project. During this process it is decided which work will be carried out by sub-contractors, including planning of the requirements (numbers and skills levels, labour-only or supply-and-fit). Sub-contractors can be identified and invited to tender (or negotiate) through word of mouth, newspaper advertising, billboards at the site, or through the appropriate local community structures. Unless you have checked their track record and references (including physical visits to projects completed by them), try out new sub-contractors on a probation system. Give them a small part of the work to start with, and monitor their performance and capability from the start. They might struggle with small aspects of the work that can easily be rectified on the spot with guidance and training from the site supervisor. Sometimes the sub-contractors may show potential and willingness to learn, but will require more guidance, training and/or mentoring. You will be able to see if they have potential; if not, you will have to let them go.

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When signing sub-contract agreements, make sure the following is included:

• Agreement on price and performance outputs (basis for payment) • Payment frequency and methods (bank accounts and type of payment preferred
(e.g. electronic funds transfers))

• Dispute-resolution procedures that allow for inexpensive alternatives to litigation
and arbitration, such as mediation

Labour-only or supply-and-fit sub-contractors
Most of the less specialised types of work or trades that make up the shell and basic finishes of the building(s) is done by labour-only sub-contractors, with the main contractor providing materials, and larger types of plant. Labour-only sub-contractors are used for:

• Foundations and general non-structural concrete work • Bricklaying • Plastering and screeds • Painting • Tiling • Roofing • Finishing carpentry (fixing skirtings and ironmongery, hanging doors)
With more specialised types of work, it is more practical to allow the sub-contractor to work out the types and quantities of materials required, and to provide it – this is done by supply-and-fit sub-contractors. Many of these sub-contractors carry small stocks of the most commonly used fittings, fasteners and consumables used in their trade. The work in this category includes:

• Plumbing • Electrical work • Glazing • Ceilings • Fencing • Paving • Formwork • Reinforcing steel • Kitchen cupboards and built-in cupboards or wardrobes • Curtain tracks • Access control and security systems • Lifts for multi-storey tower blocks
Depending on the entity’s technical expertise, its willingness to take on the supply of more specialised materials, and the availability and skill of local labour-only subcontractors, most of the above could also be done on a labour-only basis. This places a heavy burden of risk and co-ordination on the entity as contractor, and requires a high level of capacity and skills (in-house and/or outsourced).

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Some of the issues that need decisions and management in labour-only sub-contracting, are:

• Agreeing who provides what tools and equipment – it is customary for the subcontractor to provide the personal tools used by artisans such as trowels and floats, spirit levels, building lines, hammers, chisels and bolsters, saws, tile cutters, paint brushes and rollers

• Agreeing on how to deal with excessive waste, and damage in handling of
materials supplied by the main contractor – it is a good idea to agree on reasonable figures for consumption and waste beforehand, and to make the sub-contractor responsible for consumption and waste in excess of the agreed figures

• Agreeing on how to deal with loss through theft – it is usual to insure against
this, but to make the sub-contractor responsible for any excesses payable on materials lost while in their direct care

• Agreeing on how to deal with defective work. Sub-contractors must be held
liable for the cost of repairing defective work. The problem is that while they may be able to re-do the work without extra compensation, they can often not afford to replace materials that are wasted in the process, and some kind of compromise is usually negotiated An agreement can be made with labour-only sub-contractors (or for that matter, with community-based labour teams that intend setting themselves up as sub-contractors), where the entity purchases tools and equipment at the beginning of a project, and then sells it to the workers on the basis that the cost is recovered through instalments deducted from each progress payment to the worker/s, so that by the end of the project they own the equipment.

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A Pro Forma agreement is given below.

Agreement of Purchase and Sale of Equipment
Sub-contractor/team no: Date:

Understanding and agreement: The entity requires certain construction work to be undertaken. The entity has the skills to undertake this construction work. The entity does not have the tools & equipment required to undertake this construction work. The entity and the sub-contractor have entered into a separate agreement in which the contractor will undertake the construction work. It is agreed between the sub-contractor and the entity that: • the entity will purchase the required tools /equipment (as described in the schedule below) • the sub-contractor will have use of the tools /equipment as from signature of this agreement • the sub-contractor will be responsible for care, maintenance and protection of the equipment from the time of taking possession of it • the sub-contractor will make payment to the entity as described in the payment schedule below. • once all payments are made as described in the payment schedule below, ownership of the tools/equipment will rest with the sub-contractor • until all payments are received, ownership of the tools /equipment will remain with the entity Schedule of tools/equipment:
Qty Description of tools/equipment Rand value

Schedule of payment:
Payment No Due date Amount

Any damage (excluding fair wear and tear) or non-return of these goods will be for the account of the contractor, who hereby agrees that cost of repair/replacement will be deducted from any payment due to him by the entity.

Goods received by the sub-contractor: Who agrees to the payment schedule For the entity:

Print name

Signature

Print name

Signature

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Quality control
Quality assurance (QA) and quality control (QC) is a “science” in its own right, and many large manufacturing and construction companies have instituted comprehensive Total Quality Management (TQM) systems in their enterprises. Quality construction starts with correct design, detailing and specification; selecting (and training, if needed) the right contractor or sub-contractors; followed by diligent monitoring and supervision. The contractor should strive to establish, through a combination of training, incentives and discipline, a “culture” of quality where everyone is part of the QA team (as occurs in Japanese factories). Maintaining quality on site is the responsibility of the contractor doing the work. The following persons, institutions and legal and other guidelines assist in what should be a total team effort to ensure acceptable quality:

• The professional team – project manager, architect, consulting engineers • Inspectors from the Provincial Housing Department, local municipality, the
NHBRC and financial institutions

• The clerk of works (c.o.w.) and/or resident engineer (RE) if one is employed • The National Building Regulations (NBR) authority • Guidelines, standards and codes of practice laid down by the SABS and the
NHBRC

• Agrément and MANTAG certification of non-conventional building products and
systems by Agrément SA For the entity acting as part-time contractor, quality on site can be promoted by following a set of simple steps, including: 1. Proper selection, handling and storage of materials on site to avoid damage to components and articles, spoiling of cement and timber products by water, and contamination of aggregates 2. Calling for samples of materials from suppliers and inspecting them for quality before ordering 3. Regular testing of compaction of filling, and concrete crushing strength, by making and submitting concrete test cubes to the nearest laboratories 4. Getting bricklayers and plasterers to build samples of work to set an agreed and acceptable standard before the main work starts In addition, site supervisors must observe the following precautions during the execution of the work:

• Compaction of filling under floors
Common practice when excavating trenches is to dump the excavated material on the inside of the future room, and roughly level and compact the total depth in one operation once the foundation walls are built up to surface bed level. This means only the top portion is properly consolidated, and subsidence and cracking of floors can occur later. The proper method is to place the filling in layers not exceeding 150 mm to 200mm thick, dampening and compacting each layer thoroughly before the next layer is placed.

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• Remember to allow mortar in foundation brickwork to set for at least three days
before using mechanical compactors, as the vibrations may crack the joints and loosen bricks.

• Proper curing of concrete and plastering
Large exposed concrete surfaces such as surface beds and slabs must be cured for at least seven days after placing to avoid cracking, by wetting with a fine spray or covering with plastic sheeting or wet sacking as soon as the concrete has set (within one to two hours), and then keeping it covered or wetting with a hose three or four times a day. Special care must be taken on very hot and very dry, windy days. Plastering of walls should be done when the building has been roofed, but even then, plastering should be cured by dampening with a fine spray, as for concrete.

• Proper surface preparations to receive subsequent work
Excavated surfaces of foundation trenches and filling under floors must be compacted and dampened before concrete is placed against it to avoid rapid absorption of water from, and subsequent loss of strength of the concrete. Brick and concrete surfaces must be thoroughly clean, dry and free of loose bits or dust before applying plastering or screeds. Smooth concrete surfaces must be roughened by chipping (and then cleaning again), or by applying a cement slurry coat or patent plaster key before plastering. Give brickwork, and especially concrete, some time before plastering, to allow for the structure to complete its drying shrinkage and settlement processes. Surfaces to be painted or waterproofed must be cleaned and prepared according to manufacturers’ instructions before painting, and the correct paint systems used (bonding liquid, knotting, primer, undercoats and finishing coats). Do not paint concrete or plastered surfaces too soon after they have been put in place.

• Instal lintels over windows and openings correctly
Lintels on their own, or with only a few courses of brick or block work over them, do not function properly as “beams”, and will sag. There should be at least five or six courses of brickwork (preferably reinforced with “brickforce”) over lintels to bond with the lintel into a deep beam. Lintels must have adequate bearing surfaces supporting them on either side of the opening. When a lintel is placed over an opening, give it positive camber (slight upward bending) with a temporary support in the centre. When the brick work over the lintel has dried and settled after a few days, the support can be removed and the lintel will sag slightly as it takes the full load, and end up straight rather than slightly sagging.

• Mixing and using concrete and mortar on site
• Use clean and well-graded aggregates • Use clean water • Do not be tempted to add too much water to get better workability • Use “fresh” cement (discard if older than six weeks, or if showing signs of moisture or hardening in the pockets) • Use mixed concrete or mortar before setting is complete (within two hours of mixing, sooner on dry, hot or windy days) • Do not re-use mortar or concrete that has lost its plasticity by mixing in water again

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• Be careful of segregation of concrete constituents during transportation (after a very bumpy ride) or placing (pouring from heights of more than 0.5 m) • Do not overdo striking off, trowelling and floating of surface beds and screeds. It causes “bleeding” (congregation of lighter cement and mix water on the surface, weakening the concrete below, and creating a thin, wet cement-rich layer at the surface that will crack or crumble later)

• A few general tips
• Check that the setting-out of the works is square and as per the dimensions indicated on the drawings • Constantly check if brickwork and plasterwork is still level and plumb • Keep wet mortar off aluminium frames • Protect wooden frames against bumps and scuffing • Ensure door and window frame lugs, and that roof anchors are securely built in • Fill solidly with mortar behind steel door frames as the work proceeds • Ensure that roof trusses are installed level, plumb and at the right centres, and that roof structures are adequately braced • Do not hammer roofing screws through corrugated or profiled sheeting. Drill holes first • Protect completed works or partly completed works against damage during further building operations • Keep the site neat and tidy at all times. It is part of general discipline that also promotes pride in the work, quality, health and safety

Check plasterwork to be plumb with spirit-level

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Required tests, inspections, approvals and certificates
Compulsory tests
• Filling compaction tests
When the density of compaction of filling over site or under floors, paving and roads is stipulated in the specifications by the engineer, tests will have to be carried out by a specialist laboratory to determine whether or not the specified densities have been reached. Densities are usually designated as follows: • 88%, 90% or 93% MOD AASHTO” for light-duty applications, as for under domestic floors, or bottom layers of built-up bases under roads and paving • 95% MOD AASHTO for layer work under light- to medium-duty roadworks such as in residential projects, and for middle layers in built-up road bases • 98% MOD AASHTO for heavy-duty applications such as the final layers under roadworks, and factory floors carrying heavy loads Tests are carried out by sonar (sending light dosage radiation into the filling), or by penitrometer (knocking a sharp peg into the filling, and measuring the resistance or refusal level). Both these devices are small enough to be transported on the back of a pick-up truck.

• Concrete strength testing
Non-structural concrete such as in domestic strip-foundations and conventional surface beds is usually specified in terms of mix proportions, for example, 1:3:6 concrete, meaning if the cement, sand and stone are mixed in those proportions by volume, the concrete should have sufficient strength for its intended purpose (there is a substantial safety factor built in to allow for tolerances on site). No tests are required. Structural concrete, on the other hand, is always specified by the design engineer to have a specific crushing strength, for instance: “Reinforced concrete 25 MPa in columns”. MPa stands for Mega Pascal, a commonly used SI unit of pressure. A concrete laboratory is able to design mix proportions that give the required strength for aggregates from a particular source. Alternatively, the Portland Cement Institute (PCI) publishes booklets that contain the nominal mix proportions for a range of concrete crushing strengths. In this case, however, the engineer cannot take chances, and the contractor is required to have samples from every major pour tested by a laboratory. The PCI booklets mentioned above contain instructions on how to make the test cubes, and when to have them crushed (usually three sets of three from every pour, with three cubes crushed after seven days, 21 days and 28 days, respectively). The strength of hardened concrete that appears suspect can be reasonably accurately tested on site by the “Schmidt Hammer”, a device that measures resistance to penetration; or by drilling out cores and having them crushed in the laboratory.

• Drains and water pipes
Drain pipes are tested for correct falls, and drain and water pipes for leaks under pressure. There are various methods these days (old fashioned “mirror” test, or more modern laser-based methods). Your plumber should know about these test requirements.

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• Tests on the electrical installation
Tests on electrical installations are a legal requirement, and are prescribed by the SABS codes of practice.

Inspections
As the work proceeds, regular inspections are held by various parties. There are basically three types of inspections: 1. Internal inspections by the main contractor to check on sub-contractors’ work 2. Inspections by the professional team employed on the contract 3. Inspections by third parties who have an interest, for example, the provincial and local governments, municipality and financial institutions

Contractor’s own internal inspections
The contractor’s site agent and construction/project manager carries out regular inspections to ensure that sub-contractors and labour are doing their work properly. The work done at certain critical stages is either approved, or instructions are issued to sub-contractors to rectify mistakes. Typical aspects that are inspected, include: 1. Setting out of the works 2. Foundations (before inspections by external parties) 3. Filling and services under surface beds 4. Walls and wall ties (building in of windows and door frames, roof ties, brick\ blockwork plumb) 5. Roofing – level, plumb, secure 6. Quality checks on finishing (plasterwork, carpentry, tiling, plumbing, paintwork etc.) 7. Hand-over These internal inspections are done before the inspections by external parties such as the engineer or municipal inspectors.

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A pro-forma inspection sheet is given below.

Inspection report - Setting Out
Stand no.: Sub-contractor/team no.: The setting out of unit and foundation on the site, according to the site plan, was inspected on (date) by Tick the appropriate box:. Set out correctly to the site plan. Set out square and true Set out incorrectly to the site plan, and the site instruction number has been issued to the sub-contractor t ocorrect the error Set out in a manner that is not squre and true, and the site instruction number has been issued to the sub-contractor t ocorrect the error Set out incorrectly to the site plan, however due to the following reasons, (name), and was found to be: Date:

the contractor has been instrucdted to continue Important remarks

Inspection carried out by: Print name Signature

For the sub-contractor: Print name Signature

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Inspections by the professional team
Inspections of the work are carried out regularly (usually just before progress meetings on site) by the professional consultants such as the architect, structural/civil and electrical engineer to monitor quality and ensure that the building is being built in accordance with the drawings and specifications. Consultants must also be called out to inspect certain specific aspects such as:

• Foundation excavations (and reinforcing steel where required) before concreting
– by architect and/or engineer

• Filling under floors before pouring surface beds • Formwork and reinforcing steel before concreting columns, beams and slabs • The range of inspections at completion and hand-over as described more fully
in the section on contract administration The quantity surveyor should also be called to measure up on site the actual quantities of provisionally measured work such as foundation depths, and plumbing and drainage before the work is covered up.

Building control – inspections, approvals and certificates
The National Building Regulations oblige municipal building offices to carry out building control, including scrutiny of building plans, inspections of certain aspects of the work, as well as issuing of electrical compliance and occupation certificates. Municipal inspectors usually need to be called out for the following inspections:

• To approve excavations and that the building is correctly set out not to encroach
on building lines (and to check if reinforcing steel is in place for areas where it is prescribed because of soil conditions) before concreting

• To approve compacted filling before surface beds are poured • To check that Damp Proof Courses (DPC) are in place under walls and window sills • To check that drain pipes are laid properly before they are covered up • At completion, to check that electrical installations are safely wired, and that
buildings have been completed in accordance with the approved plans, and are habitable, before issuing compliance and occupation certificates It is usual to call out the inspector the day before an inspection is due, either by telephone, or by placing an inspection request slip in a designated box at the municipal building office. If there is an engineer working on the project, many municipalities will forego some of the inspections above, and rely on his professional responsibility of ensuring the building complies with safety requirements.

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Other external inspections (funders)
Funders such as the Provincial Housing Department (subsidy), the National Housing Finance Corporation (NHFC), and private financial institutions will send out their own inspectors to approve the work done before paying out subsidy tranches or loan draw-downs. When applications are made for payments, the institutions will automatically send out their inspectors. In addition, where a project is registered with the National Home Builders Registration Council (NHBRC), that organisation will also send out inspectors at regular intervals to monitor the quality and correctness of work.

Health and safety
Introduction
Maintaining health and safety on a building site requires common sense and carefulness. In addition, however, there are statutory requirements in this regard contained mainly in the Occupational Health and Safety Act (OHSA), Act 85 of 1993 and its amendments. Anyone acting as a building contractor should obtain and study a copy of OHSA and its regulations. The Act lays down guidelines and prescriptions for, among other things:

• Direct duties owed by employers to workers such as:
• Training • Taking adequate precautionary measures to prevent accidents and to promote safety

• Co-operative duties, such as:
• Worker representation with regard to health and safety matters – written appointment of a democratically elected safety representative where more than 20 persons are employed, and committees where more than one representative is appointed • Employer/employee co-operation and self-regulation • Obligation of the employer to comply with procedures that form part of independent policing function of the Department of Labour

Safety and accident prevention – general measures
• Issue workers with correct protective clothing – boots and overalls generally, gloves
and goggles for working with power tools such as angle grinders, dust masks

• Maintaining adequate first aid kits, and training workers in basic first aid • Regular inspection and servicing of tools and plant (including, for example,
checking wiring and plugs on power tools)

• Keeping sites tidy – not having dangerous obstacles (sharp pieces or piles of
rubble, planks with protruding nails) lying around over which workers can trip and fall

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General signage

Signage requirement for protective clothing and accessories

• Ensure temporary support works, such as scaffolding and props, are secure and
not overloaded. Scaffolding next to multi-storey structures must be securely tied back to the permanent structure

• Storage and handling of toxic and hazardous substances – providing training in
how to handle them, and providing responsible supervision

• Placement of signage to alert all to possible danger, hazardous substances etc.

Common accidents on building sites
• Collapse of walls, sides of trenches, and steep embankments – especially after
heavy rains

• Collapse/overturning/falling of ladders and scaffolding • Falling bricks and tools from higher floors • Materials dropped from cranes or other lifting devices due to inadequate
fastening

• Workers falling off roofs, scaffolding and ladders – use proper harnesses when
necessary, for example, on steep roof slopes)

• Burns and scalds • Electrical shocks • Careless or incorrect use of tools and power
tools (for example, shattering of grinding discs and breaking off of drill bits when forced)

Unsafe scaffolding

Workers have proper safety harnesses

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Security
Site security is an important aspect of risk management on building sites. Security is required to prevent theft and vandalism, and to keep unauthorised persons off the site. It can be quite a costly item, and measures must be constantly monitored for both functional effectiveness and cost-effectiveness. The usual measures are a combination of the following (minimum requirements are highlighted in bold):

• Fencing and access control, which can be a simple gate
pass system, or a more sophisticated electronic swipe-card system. Visitor logs should be kept

• Hired guards on site (including perimeter patrols at night).
This service can be provided by a professional outfit (which is expensive), or by members of the local community as part of job creation. In the latter case, the HC must Fenced site ensure the members are properly trained and equipped (with uniforms for recognisability, for instance), and that all legalities and issues around liability and insurance are dealt with. Remember that the private security industry is regulated

• Placing of materials stores, and parking of plant and equipment where they
are visible from site offices and guard huts, and are well-lit at night

• Armed response service - optional • Regular liaison and good relations with local police • Regular liaison and good relations with local community structures

Contract administration
The process
After the signing of the building contract, the contractor takes possession of the site for the duration of the contract. This is done formally through a site hand-over meeting. At this meeting times and agendas for future meetings are usually agreed on, boundary pegs and datum level benchmarks are pointed out to the contractor (after which he takes responsibility for their maintenance and protection), and samples of brickwork, etc. are asked for to set acceptable standards. Standard procedures for contract administration include holding regular (weekly, fortnightly or monthly) site meetings where progress, quality, contractor’s queries and information needs, etc. are monitored and discussed in order to facilitate the smooth running of the project. There are also procedures for claims from the contractor, variations required by the employer, interim progress payments to be made to the contractor, and for practical and final completion of the contract.

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In cases where the entity acts as client/employer/developer, the principal agent or project manager working as its agent runs the contract administration, with the contractor responsible for:

• Hosting site meetings • Providing assistance to the professional team in monitoring, measurement, pricing
of variations, project cash flow forecasting

• Providing information required for monitoring progress • Maintaining drawing registers and site instruction books, and relaying information
from the employer and his agents to site staff, sub-contractors and suppliers

• Co-ordinating sub-contract works
In some cases, the role of the professional team is limited to design only, and perhaps limited supervision. In such cases, the entity acting as main contractor will take on much of the contract administration. Most of the guidelines and prescriptions referring to the architect below will apply to the contractor, and references to the contractor will apply mainly to sub-contractors working for the entity. In summary, the following aspects are managed:

• Site hand-over to contractor • Regular progress and other project meetings • Regular monitoring of:
• Quality • Progress • Contractor’s resources on site (personnel and plant) • Daily activities and incidents (site diary kept by contractor) • Record of rainfall and bad weather conditions

• Management of:
• Instructions (especially site instructions vs. variations) • Contractor’s claims (extras and delays)

• Interim, Practical, Works and Final Completion procedures (inspections, handovers, a defects list, etc.)

• Documentation management
Particular attention should be paid to the following areas of contract administration, which often present problems, or are not well understood:

• Delays and extension of time • Retentions/performance guarantees • Breach of contract/non-performance • Insolvency • Ownership of materials paid for • Practical completion/beneficial occupation • Patent/latent defects • Contractors’ claims

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Contract completion and hand-over
Standard building contracts are based on the following procedure:

• The contractor notifies the architect that the work is ready for occupation • The architect carries out an inspection and draws up a list of incomplete and/or
unacceptable work (“snag list”)

• The contractor rectifies the items and calls for another inspection • If he is satisfied that the building is fit for occupation, the architect will issue a
certificate of practical completion, and a works completion list

• The building is occupied • The contractor attends to the items on the works completion list and calls for
another inspection

• If the architect is satisfied that only insubstantial defects remain, he issues a works
completion certificate and a final completion list. (The defects maintenance or retention period of 90 days now starts, during which retention monies are held back or construction guarantees remain in force)

• The contractor rectifies the items on the final completion list, as well as any new
latent defects that may appear during this period, and calls for a final inspection at the end of the period

• If the architect is satisfied, he or she issues a final completion certificate, and all
outstanding monies are paid out to the contractor and guarantees released

• The contractor remains liable for latent defects for five years (10 years on
government contracts)

Project close-out
Apart from the contract procedures above, the following should happen at the end of a building project:

• The contractor and/or architect obtains certificates of electrical compliance
and occupation, respectively, from the municipality and hands them to the employer

• The design consultants prepare and hand to the employer “as built” drawings
for future use in maintenance, etc.

• All material and component warranties and guarantees obtained from suppliers
and sub-contractors by the main contractor are ceded and handed to the employer

Defects liability/maintenance periods
The period between the first and second hand-overs (practical completion and final completion, or between works completion and final completion in the case of JBCC contracts) is called the maintenance, or retention, or latent defects liability period. The length of this period can vary according to the type of contract. It usually is from one to three months for building work, and 12 months for certain (mechanical) services and civil contracts.

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The purpose of this period is to “test” the facilities and services under operational conditions and to afford the client and consultants the opportunity to detect further patent or visual deficiencies. Any deficiencies in supplied equipment, systems, services, materials, workmanship, etc. (in terms of the contractual prescriptions and specifications) which become apparent during this period must be repaired/replaced by the contractor(s) at the contractor’s cost. Critical systems must be repaired as break-downs occur, to ensure smooth continuous operations by the client. Noncritical items are noted for repair/replacement at the end of this period. It is important that all visual or reasonably detectable items (by an averagely qualified person in that field) are identified during this period. Contractor(s) are, after this period, only responsible for latent (hidden) defects, i.e. defects which could not be detected by a reasonable inspection by a reasonable person at the time. This responsibility is extended to a period of five years after final completion by contracts such as the JBCC, and NHBRC enrolment. Clients should be made aware that damage they cause during this period (for example, when moving in furniture or equipment or operations) does not qualify for free repair by the contractors.

Conclusion
The above is only a brief summary of the activities during the execution/construction phase of a project. The key factors for project success remain leadership, co-operation and trust between persons and parties. Without these, no project will be completed successfully, even when the most sophisticated techniques are used.

Construction cost management
Cost-management processes
The construction process happens over relatively drawn-out periods, and involves many parties and uncertainties in its execution. Construction costs are, therefore, difficult to estimate and require special skill and discipline to manage or control. Construction-cost management starts with proper estimating and budgeting, and thereafter depends on regular and diligent monitoring, controlling and reporting right through to project completion or phase-out.

Cost management involves the following major processes
• Resource planning: Determining what resources (people, equipment, materials)
and what quantities of each should be used to perform project activities

• Cost estimating: Developing and approximation (estimation) of the monetary
costs of the resources needed to complete project activities

• Cost budgeting: Allocating the overall cost estimate to individual work items,
and projecting the expenditure over time

• Cost control: Monitoring and ensuring adherence to, and controlling changes
to, the project budget or cost base line

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The major cost-management activities as they relate to the stages of a construction project can be summed up as follows:
Project stage
Project identification and initiation (Briefing stage) Pre-design planning (Conceptual design stage) Pre-contract planning (Preliminary and final sketch plans) Construction stage (Working drawings) Project completion or phase-out

Cost management activity
Setting upfront unit cost norms or square metre estimates based on broad accommodation or functional parameters (cost planning) Preliminary unit cost/square metre/elemental estimates based on conceptual drawings. Adjust briefs and/or budgets Refined (elemental) estimates based on sketch plans. Proper documentation and procurement leading to signed contracts that form the basis for cost control throughout the contract Monitoring, controlling and reporting of cost changes, and advising client on steps to take to avoid cost overruns Skilled and fair final accounting

Cost budgeting
Cost budgeting involves allocating the overall cost estimates to individual work items, in order to establish a cost baseline for measuring project cost performance. Cost budgeting usually includes cash-flow projections to enable the planning and monitoring of expenditures over time.

Cost budgeting process
Inputs
1. Cost estimates 2. Project schedule

Tools & Techniques
1. Cost estimating tools and techniques

Outputs
1. Cost performance baseline

(Source: A Guide to the Project Management Body of Knowledge)

Cost control
Cost control is concerned with (a) influencing the factors that create changes to the cost baseline to ensure that changes are beneficial, (b) determining that the cost baseline reflects changes, and (c) managing the actual changes when and as they occur. Cost control includes:

• monitoring cost performance to detect variances from plan • ensuring that all appropriate changes are recorded accurately in the cost
baseline

• preventing incorrect, inappropriate, or unauthorised changes from being included
in the cost baseline

• informing appropriate stakeholders of authorised changes
Cost control includes searching out the reasons for both positive and negative variances. It must be thoroughly integrated with the other control processes (schedule control, quality control, etc.). For example, inappropriate responses to cost variances can cause quality or schedule problems, or produce an unacceptable level of risk later in the project.

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Cost control process
Inputs
1. Cost baseline 2. Performance report 3. Change request (variations) 4. Cost management plan (including cash-flow projections)

Tools & Techniques
1. Cost change control system 2. Performance measurement 3. Additional planning 4. Computerised tools

Outputs
1. Revised cost estimates 2. Budget update 3. Corrective action 4. Estimate at completion 5. Lessons learned

(Source: A Guide to the Project Management Body of Knowledge)

The initial contract price of a building project is hardly ever the final cost to the employer. All building contracts are based on the principle that if the execution of the contract involves the contractor incurring additional costs or expenses which could not reasonably have been foreseen at the time of tender, he/she must be compensated fairly for such additional costs or expenses. The initial tender or contract price is based on the pricing of quantities of work taken off the drawings by the contractor himself in the case of a lump sum, or without quantities, type of contract; and by the client or his quantity surveyor in the case of a quantities-type contract. These quantities form part of a tender document which, in the latter case, would be a bill of quantities.
Section of Document
1. Notes to tenderers 2. Preambles (specification) 2.1 General preambles (bound in or referred to as separate document, for example, Model Preambles of ASAQS) 2.2 Particular or works specification or Supplementary Preambles 3. Preliminaries (“P & G”) 3.1 Conditions of contract (clauses listed) 3.2 Standard/model preliminaries items 3.3 Special items 4. Trade bills consisting of measured items of work with quantities, provisional quantities, or PC amounts as the case may be 5. Provisional sums 5.1 Provisional sums 5.2 Item for contractor’s profit 5.3 Item for contractor’s attendance on specialist sub-contractors 6. Final summary, including allowances for contingencies, VAT, etc. To provide tenderer with standards and codes of practice for execution of the work, and to assist in pricing adequately to meet these requirements To allow tenderer to price for contract clauses with cost implication, and for general indirect or site overhead costs, for example, supervision, temporary services and facilities, etc. To allow tenderers to price for the direct costs (labour, material, etc.) of executing the work To allow employer (through his agents) to insert allowances for the cost of work (usually specialist sub-contract work) for which designs have not yet been finalised To arrive at tender price or contract price

Purpose
To provide administrative information and general instructions to the tenderer

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A building contract price (based on accepted tender) may change during the course of the contract due to any of the following:

• Re-measurement on site of provisionally measured quantities • Changes in design and/or specification (“variation orders” or VOs) • Adjustment of provisional sums and prime cost amounts (“PC amounts”) when more
accurate information (for example, tender prices) become available

• Delays and extensions of time, due to change in scope of work, lack of information,
etc.

• Omission of allowances for contingencies • Inflationary or negotiated fluctuations in the cost of labour, materials, etc. (“Contract
Price Adjustments”) Important criteria for determining who is liable for and must absorb cost changes:

• The type of contract (“With Quantities” or “Without Quantities”/Lump sum)
determines who will accept responsibility for the accuracy of quantities used to determine the tender price.

• Whose responsibility was it, in terms of the contract and good common practice, to
avoid the circumstances that gave rise to the additional costs and expenses? On a building project, the instruments/processes involved in cost control generally include cost estimates/plans, budgets, cash flow projections, tender and contract documents (including bills of quantities where available), progress payment certificates including contract price adjustments due to escalation of labour, material and other costs, pricing of variations, re-measurements and other adjustments, cost reports and final accounts. The final account is a document, usually prepared by the quantity surveyor, which sets out in detail, and then summarises, all legitimate and accepted changes to the original contract price during the course of the contract. The final statement is a summary of all the calculations involved in preparing the final account, which reflects all the cost changes that occurred on a building project.

Cash-flow management (income and
expenditure)
Working capital requirements
A main contractor needs operating capital (cash and/or overdraft facilities at the bank) to finance labour wages, cash purchases of material and other ongoing expenses in the periods between monthly progress payments from the employer and/or funder. The entity acting as main contractor would have the same requirements. The amount required varies according to the nature of the project, sub-contract payment terms, credit facilities with suppliers, arrangements with funders for release of funds (and their administrative ability to stick to those arrangements), and internal ability to manage cash flow. Experience shows, however, that a minimum of 10% to 20% of turnover (contract value) is usually needed as an overall reserve in the form of cash and/or overdraft facility.

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What is cash flow?
Cash flow is simply the flow of money in (income) and out (expenditure) of the contractor’s purse on a project. Expenditure is due at fixed times (payday for labour and sub-contractors, account payments due for suppliers), whereas the corresponding income for work done can be delayed for a number of reasons, or could even be less than the expenditure incurred in doing the work when disputes or delays arise in the settlement of claims for extras, or substantial extensions of time are not accompanied by monetary compensation for the extended site costs (for example, rain delays). If there is no “mark-up” on costs, meaning that, in theory, income is always exactly equal to expenditure. This leaves no buffer for covering errors in estimating or measuring for payment, or for shortfalls created when funders hold back retention monies.

Cash-flow forecasting
In order to prepare for temporary shortfalls between income and expenditure, and to have adequate cash and/or overdraft facilities in place to bridge those shortfalls, the entity must draw up cash-flow forecasts or projections as accurately as possible. This is usually done by allocating monetary values for expenditures (from cost estimates) to activities reflected on the building programme. Income is forecast in accordance with agreed payment milestones, or valuation methods, allowing for the time it takes to process payment applications. In the case of the entity building with mark-ups on cost, or agreed contract fees, expenditure flows will be forecast by linking cost estimates to building programmes, but projections of income flows will be based on the “selling rates” for completed work. Hopefully, estimating, pricing and on-site cost control will have been done in such a way that project income at any given time of measurement for payment will exceed the expenditure incurred. The problem of discrepancy between the date income is realised, and the dates on which expenditures are due remain, however, and bridging finance and/or cash reserves may still be needed.

Construction finance (operating or working capital)
As stated previously, contractors cannot operate effectively without some working capital to finance immediate expenses such as fortnightly wages and cash payments for certain materials in the periods between receipt of progress payments or draw-downs. For private contractors, the usual source of such bridging finance is a combination of cash reserves (savings) and bank overdraft. Private contractors also tend to minimise the requirement for cash by trying to negotiate extended payment periods for materials bought on credit, and by “juggling” payments to larger sub-contractors.

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If the entity, acting as contractor, qualifies as a developmental organisation, it will be able to successfully motivate for assistance (for example, working capital loans at favourable interest rates, and with less stringent conditions than a straight bank overdraft) from development finance organisations such as:

• NURCHA, which supports small contractor development and unblocking of
stalled housing construction projects through the provision of bridging finance

• Small business support organisations such as the Industrial Development
Corporation (IDC), Ntsika, Khula, Small Business Development Corporation (SBDC), and the Department of Trade and Industry (DTI) Some commercial banks also have divisions that deal with small and emerging contractors, and are able to provide special working finance packages. The best ways to go about identifying and selecting the most appropriate option(s) are to: 1. Contact all the above organisations and obtain information on the products they offer, and the criteria for qualification 2. Get an accountant to help you assess your working-capital needs in conjunction with estimators and contracts managers, and to prepare applications

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c

Co-operative community-based construction
Reasons for community involvement in development projects
The rationale for community involvement in projects that directly or indirectly affect the lives and living environments of those in the community usually includes factors such as:

• “Buy-in” through participation • More effective need-satisfaction/more choice • Empowerment/autonomy • Capacity building • Local income generation
Participation should ideally take place at all levels of project planning and implementation, especially with regard to issues such as site selection, layout planning/urban design, unit design and specifications for housing, participation in construction activities, etc.

Community-based construction – the “development team” approach
Introduction
Community-based construction in a sensitive and non-imposing manner aims at the use of labour-based projects to promote the emergence of local entrepreneurs who, with adequate technical, commercial and financial support and instruction, could in due course become fully fledged contractors. In community-based projects, members of the community can also become involved in:

• The operation of stores and facilities • The support provided to local contractors by involvement in administration,
monitoring of progress, etc.

• The transport of materials to local labour-only contractors • The manufacture of certain materials • The supply of minor materials • The security of the site
Contractor development within a community will not take place without professional support and the acquisition of external resources. The “development team” approach can provide emerging contractors with the support that they require and, at the same time, allow the community to retain ownership of the project and afford its members opportunities for employment.

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In the development team approach, experienced and suitably qualified people assist local community-based contractors at the lower level of contracts with the administration and management of their contracts, offer technical training, engage specialist contractors, and supply the necessary materials and equipment. The development team employs and trains members of the local community to run stores facilities, monitor progress, assist with administration, etc. Normally, the local contractor enters into a contract with the client, and the development team is appointed directly by the client. The development team is regarded as the construction facilitator that will arrange to provide resources that the contractor lacks.

The composition of a development team
The duties and responsibilities of the client, the development team members, and the contractor, are summarised in the table below for the lowest level of labourbased contract. A client may require the development team to undertake additional constructionrelated activities such as the co-ordination of the project, liaison with the public, overall project management, etc. Conversely, the client may undertake certain responsibilities, for example, design work or materials management.

Duties and responsibilities of the development team members
Body
Client

Duties
• Appoint a development team • Fulfil obligations in terms of the General Conditions of Contract • Provide finance for community-based contractors and the purchase of materials • Permit alternative tender structures

Architect/Engineer

• Administer the contract • Direct staff who: • Check setting out • Measure the works • Conduct inspections to ensure compliance with specifications • Arrange acceptance tests

Architect/Design engineer

• Design the works • Prepare contract documentation • Advise on materials

Materials manager

• Procure materials • Store materials • Issue materials • Account for materials

Construction manager

• Arrange for specialist work • Arrange for the supply of plant and equipment • Advise, assist and train the labour-based contractor in administration and execution of the contract • Arrange fortnightly payments to the labour-based contractor • Transport materials to the site

Community-based contractor

• Provide supervision • Provide labour • Provide small tools

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Appropriate forms of contract for community involvement in construction projects
Introduction
There are a number of “simplified” standard contract forms for building work that have been specifically drafted for use on smaller works. Their use is not limited to situations where so-called emerging contractors are involved, and they can be used generally for smaller and simpler building projects (such as single dwellings, small community centres and facilities, etc.). The use of standard forms is generally recommended because:

• Professionals and other parties know the contents, and understand how they
work

• They will have been tested in the field and cover most situations that can arise
on a project

• Preparing new contracts is costly, time-consuming, and risky
Although it is wiser to keep to standard forms, there are some instances where purpose-made contracts may work better, especially where labour-only contractors, or community-based construction teams are being managed by the employer without a main contractor.

Levels of contract
As construction develops, the role of the construction manager and materials manager diminishes and the nature of the support that is required changes. To accommodate developing contractors within a community at any stage of development or level competence, different levels of contract with increasing responsibility being placed on the contractor is required. At the lowest level of community-based contract, the emphasis is on introducing contractors to tender procedures and contract documentation; the acquisition of basic technical and administrative skills; and the employment and supervision of labour. At this level, contractors develop only limited managerial, commercial and administrative skills, particularly with respect to the procurement of materials and plant. At the same time, the responsibility assumed and the degree of contractual risk is minimal, since at this level, all barriers to entry are removed to enable contractors to participate in construction activities.

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Contractual responsibilities and development support required for each level of contract:
Level
1

Type of Support
Construction & materials manager

Contractor’s Contractual Responsibilities
• Provide labour • Provide small tools

Degree of Development Support Provided
• Offer advice, practical assistance and training • Provide and transport materials to site • Provide plant other than small tools • Arrange for specialist work • Arrange for fortnightly wages

2

Construction & materials manager

• Provide labour • Provide small tools • Transport materials from yard to site, and provide certain materials • Provide labour • Provide small tools • Provide site office and certain storage facilities • Provide all materials

• Offer advice, practical assistance and training • Provide most materials • Provide plant other than small tools • Arrange for specialist work • Arrange for fortnightly wages • Offer advice, practical assistance and training • Provide plant other than small tools • Offer materials for purchase • Arrange for monthly wages • Arrange for specialist work • Conduct a tender workshop • Advise, coach, counsel, guide, teach, instruct and tutor the contractor • Render assistance in the setting up of proven systems to enhance management and business skills • As for Level 4

3

Construction & materials manager

4

Mentor

• Provide labour, materials and plant • Provide 5% surety • Engage specialist contractors • Finance all contractual obligations

5

Mentor

• As for Level 4 • Provide 10% surety

Non-standard or purpose-made forms of contract
Drafting of contracts requires specialist knowledge, wisdom and experience, and any deviation from standard contract forms must be approached with circumspection and care. The range of contracts is very wide, and only one example of a contract designed to cater for various stages of contractor development or “sophistication” is discussed. The main features of this contract are as follows:

• It is specifically designed to “… foster local contractor development and promote
overall social, technical and developmental community goals such as local employment creation, fair labour practice, and capacity building within the community institutions”

• It provides for five stages of contractor development from labour-only, to limited
plant and materials supply, to fully-fledged main contractor. The tenderer indicates his/her level of development and this is checked through a skills and capacity assessment. This means the contract can be broken up into many parts allocated to different contractors. This broadens the scope for local participation, but also increases the risk and the management input from agents and consultants

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• It spells out, in clear detail, the responsibilities of the contractor and employer
respectively for each stage of contractor development

• It guarantees retention penalties for late completion, and insurances are treated
in accordance with level of contractor development and ability to provide

• Offer and acceptance are contained in one complete document • It contains comprehensive guidelines and instructions on how to use the
document

• It contains a description of the works and guidelines to the contractor on how
to carry out the works

• It contains a simple milestone-based payment system graphically explained to
contractor

• It makes provision for employment of a principal agent and other consultants
It is a complex document that requires that contractors are assisted by the employer and/or his agents to interpret and complete it before the tender stage. However, it has been used with success. Its main advantages are as follows:

• It maintains the discipline of sanction and responsibility, without making it too
onerous for small, unsophisticated contractors

• It allocates some risk to the contractor commensurate with his or her ability to
absorb it

• It allows for contractors to develop on-the-job and progress to higher stages of
development as the work proceeds

• It gives the employer a versatile and appropriate tool for spreading the advantages
of preferential procurement, local employment and capacity building as widely as possible within a certain community Its main disadvantages are as follows:

• It is complex and requires extensive management input to administer • It places more than usual risk and responsibility on the employer and his or her
agents The above is, however, unavoidable based on the types of situation the contract is intended to be used in.

Recommended for use in the intended circumstances only

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t

Training
Training objectives
The main objective of training is to equip existing and aspiring small contractors and/or sub-contractors with the practical know-how and skills needed to develop their endeavours into profitable enterprises as quickly and effectively as possible, while maintaining a high level of quality and professionalism, by:

• Familiarising participants with sound construction principles and methods • Enabling them to plan, organise, lead and control construction site activity • Enabling the conversion of information contained on drawings and in
specifications into a format for pricing and ordering of materials

• Training participants in the skills of obtaining access to credit and finance • Explaining contract administration systems and procedures by means of a
practical manual

• Developing capabilities for the efficient and sustainable management of their
own concerns

Planning and preparing for training
Introduction
Ad hoc unplanned training is a waste of time and resources. Stand-alone or onceoff training sessions have their place, but to be really effective, training should be programmatic, and include the following: 1. Analysis of generic functions in a small and growing construction company 2. Identification of core competencies required for the above 3. Setting of unit standards for training in the above 4. Setting up guidelines for training and curricula 5. Identifying and accrediting training service providers 6. Obtaining funding 7. Calling for training proposals 8. Training on a progressive basis (with proper assessment criteria for the advancement of candidates from one level to the next) 9. Post-training impact assessment and mentoring

Who should be trained?
• Carry out local skills audit in collaboration with CBO and others • Match skills required with skills available, and identify training and mentoring
needs, and external support required (for example, project management)

• Assemble the core teams with the “right” mix and clear agreement on lines of
authority

• Design and plan the training programme

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Pre-construction training
Before moving on to site, training should take place on basic aspects of good construction practice – site organisation and work planning, resource analysis and allocation, care and maintenance of tools and equipment, health and safety on site, controlling waste, simple programming and monitoring of progress, and quality assurance.

Example: Pre-construction Training Programme
Subject
1. Construction technology and practice (principles, methods and materials): • Brief overview of the construction process • Interpretation of drawings and specifications • Construction technology with regard to: • Setting out and levelling • Foundations and sub-structures • Brickwork and masonry • Roofs and ceilings • Plastering and screeds • Windows and doors • Cupboards and fittings • Painting, glazing, flooring • Plumbing and drainage • Electrical work • Paving and fencing 2. Site activity management: • Site layout and functioning • Basic planning and organisation • Resource utilisation • Method study • Quality control, time-cost relationships, productivity and safety • Maintenance: Plant and equipment • Labour relations, supervision and control • Programming and scheduling 3. Basic quantity surveying: • Basic arithmetic skills • Calculation of areas, volumes and mass • Principles and units of measurement of drawings for basic construction elements • Lists of materials and cutting lists • Recording of site measurements 9 9

Time (Hours)
15

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4. Procurement of work, credit and finance: • Introduction to contracts - parties, roles, relationships, rights and responsibilities • Overview of tendering methods and procedures • Costs elements - on site and off site • Unit rates and allowable WHAT IS MISSING HERE? • Price negotiation with suppliers, sub-contractors and labour, and how to go about arranging credit • Closing the bid - profit policy, consideration of external market and other factors that influence tender prices • Introduction to marketing and negotiation • Finance options 5. Contract administration: • Signing of contracts • Site and other meetings, including site hand-over, practical completion and final hand-over procedures • Internal meetings with supervisory staff, workers and sub-contractors • Keeping site records and diaries • Site instructions and variation orders • Progress and final certificates and payments • Site costing, internal certificates and cost control • Cash-flow planning and control • Basic site accounting (reconciliation of orders, delivery notes, credit notes, invoices and statements) • Wage administration • Final accounts • Insurances, levies, deposits and fees • Relations with employer, professional team, inspectors 6. Office administration and business management: • Introduction to management principles and functions, communication skills and human relations • Introduction to office functions, procedures and equipment • Information and paper management, storage and retrieval • Basic bookkeeping and accounting • Keeping overheads down • Office/site liaison • Introduction to computers and computer systems Total

6

9

9

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“Hard” building skills training
There are training colleges in most of the larger urban centres that provide accredited training with funding from the Department of Labour. The training covers trade skills such as bricklaying, plastering, carpentry and plumbing. Training is structured as follows:

• Nine weeks full-time practical training at the training centre. Trainees receive a
small allowance for food and travelling expenses during this time

• The above is followed by nine weeks’ practical work on a site under part-time
supervision and mentoring by the trainers. Trainees are paid a wage by the contractor during this phase

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t

The experiences of some entities acting as “main contractors”
There have been many cases of small-scale home building through community-based or mutual self-help initiatives in both rural and urban areas of South Africa. In some, unaided collective effort saw the initiatives through, while in others, NGOs such as affiliates of the Urban Sector Network, Habitat for Humanity; and organisations such as The South African Homeless People’s Federation and its allies People’s Dialogue and Utshani Fund played a role in setting up home-building co-operatives, and assisting with funding, planning and implementation of construction activities. Many of these experiences have been documented, and organisations can be contacted through their websites to learn more about their activities and experiences. A few cases have been selected in which the actual construction process was executed in a formal manner and the process was reasonably well documented or observed.

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Wattville/Tamboville – low- to mediumdensity housing and community facilities projects
In the early 1990s, a local civic organisation, the Wattville Concerned Residents Committee (WCRC), with financial, organisational and technical support from NGOs Planact (South Africa) and CRIAA (France), and the Dutch Social Housing Movement, embarked on a construction programme for the development of housing and community facilities in Wattville Township near Benoni, Ekurhuleni. The WCRC carried out the construction works under the designation of the Wattville Housing Association (WHA).

Construction of the houses
Although the WHA was not institutionally a co-operative in the strict sense of the word, its ideological and organisational nature was strongly community-based and one of collective action and enterprise. The housing project consisted of 182 single-storey free-standing four-room dwellings on small individual stands. Unfortunately the project was interrupted by local clashes of interest, and the houses were not all built. The project did, nevertheless, provide valuable experience in how to plan and execute construction projects in co-operative style, especially with regard to:

• Setting up the appropriate structures and procedures • Bringing together widely divergent expectations, and focusing all the parties on
the mutual co-operative effort

• Marrying community development objectives with practical and efficient
construction practice

The houses under construction

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Construction was carried out with community-based construction teams and local sub-contractors, and was organised as follows:

• Actual construction work by teams of eight people, with members drawn from the
local community (including beneficiaries), and led by a local person with certain recognised skills such as bricklaying. Initially each team was given “contracts” of four houses at a time, allowing them eight weeks to complete each set of four houses. Local sub-contractors were employed for glazing, plumbing and electrical work. Giving a team more than one house at a time gave them valuable experience in planning, programming and resource (time) management

• The “client”, WHA, provided materials, and initially all plant and tools. Some
tools and equipment were purchased from the WHA by the teams and individuals and paid off during the course of the contracts

• Initially, for the day-to-day management and supervision of the teams, a local person
with some business and contracting experience was employed on a contract basis “without risk”. He was also assigned the daily administration of materials and tools management. Later on, he set himself up as a managing contractor, and assumed full risk for managing the teams and sub-contractors, materials and equipment

• Overall construction management, training and mentoring was provided by a
professional Construction Management Agent (CMA) employed by the WHA, as were town planning, architectural and engineering services

Organisation of the construction
Project/ Construction Management

WCRC Task Group
Contract
Had to establish as legal entity (for contracts, funding etc.)

Project Manager and Shadow
• • • • • • • • Skills audit I .d. training needs Training Set up constr. man. system and procedures Contracts Materials management Finacial control Supervision and mentoring of community based construction teams

Close working relationship

Community Liaison Group
• Assistance/ communication • Workshop technical issues (layouts, housing types and design, etc.)

assist

• Allocation, tenant education, lease agreements, handover procedures • Disputes and conflict management

1 x community-based “contractor” (for houses with ‘contract’)

4 x 8 -member communitybased construction “teams” (labour only) (for houses) (with ‘contracts’) (for community centre, resources centre, etc)

1 x community-based “supervisor” (with ‘contract’) 28-member construction teams (3x) on labour basis-unemployed women and youth, trained and employed on performance ‘contracts’ (for crèche and clinic)

+

+

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Training before and during construction was provided mainly by the CMA in the form of short workshops lasting from half a day to five days, and encompassed basic contract administration and site management. On-site mentoring was continuously provided by the CMA and the supervisor, who later became a managing contractor for the teams and sub-contractors. Teams and sub-contractors signed formal contracts with the WHA. Contracts were workshopped and agreed with teams beforehand, and spelt out clearly in understandable language. They contained the following:

• Roles and responsibilities of parties, particularly regarding what was to be
provided by the client (materials, plant and constructional aids such as scaffolding, temporary services and facilities), and the teams (labour, self-organisation under supervision of site supervisor/managing contractor, responsibility for looking after materials and equipment) respectively.

• Agreed and fixed contract amounts per four-house contract (for example, R3
000 per house for providing all labour - skilled, semi-skilled and unskilled - for the construction of foundations, floor, walls, roofs, and the hanging of doors)

• Payment milestones • Penalties for late completion • Agreed rates of pay for team members • Dispute-resolution procedures The following extract from the contract documents used summarises the responsibilities of the construction team/sub-contractor and WHA respectively
B. SPECIFIC CONSTRUCTION TEAM/SUB- CONTRACTOR RESPONSIBILITIES, AND SERVICES TO BE PROVIDED BY THE WHA (TO BE READ IN CONJUNCTION WITH THE CONDITIONS ABOVE)
B1. (For “labour-only” teams/sub-contractors)* B1.1 General construction team/sub-contractor responsibilities: 1. The team/sub-contractor is responsible for all labour involved in moving materials from stockpiles or storage, mixing of concrete, mortar, etc., transporting of mixed materials to place of work. 2. The team/sub-contractor is responsible for all cutting, fitting, assembly, setting up or placing/hoisting and keeping in position and building in or fixing, of materials and components in the buildings. 3. The team/sub-contractor must provide all labour required for the temporary works such as erection, dismantling and moving of scaffolding, temporary formwork, propping, turning pieces and temporary bracing. 4. The team/sub-contractor must provide, maintain, repair and replace as necessary all hand tools, lines and small plant such as picks, shovels, gauging rods, straight-edges, etc. for himself and his workers. B2. List of services to be provided by the WHA: 1. Procurement and delivery of materials to the site or an agreed place of storage or stock-piling. 2. Provision of minor plant such as: (1) Scaffolding, trestles and props (2) Pipe roller floats (3) Profiles (4) Ladders (5) Wheelbarrows 3. Provision of major plant such as: (1) Mixers (at main contractor’s discretion) (2) Power tools and equipment (at WHA’s discretion) Any of the items in 2 and 3 above can be hired from the WHA on an agreed “rent-to-buy” basis, where it will eventually become the property of the team/sub-contractor. 4. Water and, where possible, temporary power for the work.

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The fixed agreed contract amounts, as well as allowances for wastage on materials and wear and tear on tools and equipment were arrived at by negotiating a fair balance between widely accepted industry norms and pay levels, and the actual experiences of teams in building the materials depot. It was made clear to teams that the budget for each house was fixed, and that no additional funds were available to pay for cost over-runs. (The total cost per house, including serviced stand, was around R35 000, including about R22 000 for a 42 m2 house with full bathroom and electricity). Penalties for late completion were included as a form of discipline, and were diligently applied even though it took some tough negotiation to get them accepted when a few teams defaulted early on, and felt the consequences in their pay packets. As a result, the responsibility for proper programming, planning and monitoring of tasks and outputs was quickly understood and absorbed by the teams, and there were few problems in this regard in subsequent contracts. The negotiations themselves, where teams had to substantiate reasons for being granted time extensions, were a useful learning experience. Penalty amounts were carefully set (at around 1% of contract value per day) to make the teams treat them with respect, while at the same not causing unreasonable hardship for small infringements among the team members. Because of the spread-out nature of the site, and the lack of motorised on-site transportation for materials, it was not practical to have centralised stockpiles and sheds for the storage of materials. Bulk materials (building blocks and aggregates) were delivered to stockpiles central to each group of four houses in a contract, and other materials were delivered to each individual house. This presented a security challenge. This, and other problems such as excessive waste, was solved by getting the intended beneficiaries to inhabit their properties in shacks before the start of construction. Beneficiaries were then assigned responsibility for such materials. They kept the materials with them and a well-managed system of issue-and-receipt was maintained between them and the construction teams, which often included a member of the beneficiary household anyway. (Some beneficiaries even took large items such as window frames into the shacks with them and slept on top of them.) A simple payment milestone system based on easily definable stages of construction completion was adopted. Milestone values were agreed upon beforehand and written into the contract. Measurement for payment was done fortnightly, and only completed stages were included. In practice, strict application of this would have caused some hardship, and stages that were substantially, but not fully, completed on measurement days were often included at say 75% or 80% of their agreed values.

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Example of a Payment Milestone Sheet, WorkedPayment Certificate, and Equipment Purchase

Agreement used on the Project:
Wattville Housing Association Tamboville 2 Pilot Housing Project – Payment Milestone for Houses
Stage Payment Stage Stage 1 1st payment Work Completed (Words) Foundations and floor complete 1. Setting out, and digging trenches 2. Placing and levelling concrete 3. Building foundation walls, backfilling and compacting 4. Casting surface beds and floating smooth Stage 2 2nd payment Walls up to roof height complete 1. Building all walls to plate level 2. Building in door and window frames 3. Building in cills and lintels 4. Building in roof ties
Walls
Foundation wall Floor slab Foundation Filling

Work Completed (Pictures)

Amounts due to team R2 800 (R700 per house) Less 10% Retention = R2 520 (R630 per house)

Foundation wall

Floor slab

Foundation

Filling Foundation

Stage 1
Wall plate Windows Rooftiles Door frames Walls Foundation Wall

R2 400 (R600 per house) Less 10% Retention = R2 160 (R540 per house)

Stage 2 Stage 3 3rd payment Roof on 1. Building gables 2. Making and erecting roof trusses 3. Building beam filling 4. Fixing roof sheeting and ridging
Walls
Foundation Walls Floor slab Foundation
Wall plate

Foundation

Roof
Rooftiles

Windows

Door frames Walls Foundation Wall Filling

R3 200 (R800 per house Less 10% Retention = R2880 (R720 per house)

Stage 3 Stage 4 4th payment House complete 1. Bagging outside walls 2. Plastering inside walls 3. Painting all walls 4. Hanging doors 5. Painting doors and windows 6. Cleaning house and site
Walls
Foundation Walls Floor slab
House Complete

Foundation

Wall plate
Rooftiles Windows

Roof

Door frames

Glass
Door

Walls plastered & painted Foundation Wall

R3 600 (R900 per house) Less 10% Retention = R3 240 (R810 per house)

Foundation

Filling

Stage 4 Final payment Retention work done 1. All work on final completion list done to satisfaction of WHA and the homeowner. (Final completion certificate and “happy letter” signed) Home-owner

Foundation

R1 200 (R300 per house)

Wattville Housing Association Construction Team Certificate

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Wattville Housing Association Construction Payment Certificate
Contract Details: Employer: Wattville Housing Association Contract: Contract no. TV2/Rad/001 Stand nos: 12, 13, 14, 15 Certificate Details: Certificate no.: 4 Certificate date: 25 August Construction team: Team Radebe Contract sum: R12 000.00

VALUATION: Stand no. Completed stage this valuation
3 3 2 1

Previous cumulative value
R 1 300 R 1 300 R 700 R R 3 300

This stage value
R 800 R 800 R 600 R 700 R 2 900

Total due to date

12 13 14 15 Total

R 2 100 R 2 100 R 1 300 R 700 R 6 200

CERTIFICATE:
Total certified to date Less: Retention (10%) TOTAL TO DATE Less: Previous payments (1-3) PAYMENT NO. 4 NOW DUE Less: Deduction for: Loan repayment on equipment purchase agreement R 120.00 R 120.00 AMOUNT TO BE PAID TO TEAM R 2 790.00 R 6 200.00 R 620.00 R 5 880.00 R 2 970.00 R 2 910.00

Construction Management Agent: JJ Nkosi

Date: 25 August

For: Construction Team: Petrus Radebe

Date: 25 August

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Equipment Purchase order & Loan Repayment Agreement
I, the undersigned Petrus Radebe request the Wattville Housing Association (WHA) to purchase, on my behalf, the following equipment under the conditions set out below:
Description
One pair of steel trestles 4 Scaffold planks: 50 x 228 mm x 3 m long TOTAL

Cost
R 360.00 R 120.00 R 480.00

CONDITIONS

1. REPAYMENT I undertake to repay the WHA the total amount as reflected above in the following manner: 1.1 Deduct R120.00 from each of my stage payments or,

1.2 Deduct R___________ from my retention on my contracts or, 1.3 Deduct R___________ from each of my stage payments and R___________ from my retention or, 1.4 Deduct R ___________ The deductions are to start on the (Date): 12 July 2. RESPONSIBILITIES 2.1 2.2 2.3 2.4 I undertake to be responsible for the above-mentioned equipment from date of delivery. I will keep the equipment in good condition and use it for the purpose and in the way it is intended to be used. I accept that I am responsible for the security and safe-keeping of the equipment at all times. I accept responsibility for any damage, loss or breakage, except where a manufacturing defect can be shown.

3. OWNERSHIP 3.1 3.2 The equipment and/or material remains the property of the WHA until all outstanding payments relating to said equipment and/or material has been paid. Once all moneys owing on the equipment and/or materials have been received by the WHA, then ownership of the said equipment passes to: Petrus Radebe

I hereby acknowledge receipt of the above-mentioned equipment in good working order.

Petrus Radebe
Signature

Petrus Radebe
Name

10 July
Date

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Construction of the community facilities
The facilities comprised a community centre (incorporating the administrative offices of the WCRC), a building resource centre/materials depot, and a crèche. The community centre and resource centre were built using the same approach as for the housing component. The crèche was a bigger undertaking, and also received funding from the provincial government as a pilot of its Community Based Public Works Programme, meaning that empowerment and local economic development objectives were formalised in the funding agreement. The stated objective was to provide employment for women and youth from the community, and provide them with formally accredited training. For the crèche a labour resource plan was compiled jointly by the civic, its technical advisors and the CMA. This indicated total number of workers required, as well as the minimum with critical skills to form the core of the team. The civic carried out a formal skills audit and recruitment programme in the community, and a team of around 30 was set up for the construction work. Funding was obtained from the Department of Manpower to have all team members undergo formal accredited training in various trades such as bricklaying and plastering (9 weeks full-time in training centre, followed by 9 weeks working an “apprenticeship” on site under periodic supervision of the trainers). The workforce was again divided up into teams, but this time by trade i.e. bricklaying team, plastering team, and so on. A local person with business and contracting experience was once again appointed as managing contractor, and employed the teams “with risk”. During the course of the construction some of the teams established themselves as sub-contractors, and some even left for more lucrative sub-contracting to mainstream builders elsewhere.

Créche

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Building resource centre

Community centre

Lessons learnt:
• It is important to work closely with legitimate and representative CBOs when conducting skills audits, and setting criteria for, and recruiting people for, employment on the construction teams. At the same time though, be aware of personal agendas and avoid nepotism • Training should be designed to address the real needs of the project. Do not just use material that seems to be available “off the shelf” • In training, teams must not simply be shown what to do, without further explanation of why things are done in a particular way. Maintaining progress and quality becomes much easier when construction teams understand the underlying motivations, and the consequences of non-compliance • Construction teams and sub-contractors must be well-briefed as to what is expected from them, what support they will (and will not) get, and the consequences of non-compliance with contractual responsibilities • All construction activities should be governed by well-crafted and clear written agreements, and contract administration procedures • The discipline introduced by contract conditions must be maintained consistently, but fairly, during execution (this includes adherence to agreed time-frames and payment terms, levying retentions and penalties, and not compromising on quality) • The construction manager, with assistance from on-site supervisory staff, should constantly be on the lookout for people who show promise, and create further training and promotion opportunities for them

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m

Masisizane Women’s Housing Co-operative, Midrand, Gauteng
Introduction
The co-operative was established in 1999 (and later registered under the Cooperatives Act) by a group of women in Ivory Park Township who lost their shacks in a flash flood, and decided they could not wait for government to provide them with houses. They founded a savings club, and in the first five years, provided over 100 self-built houses for members without the aid of government subsidy or other assistance, adding rooms to the houses each time it was the respective member’s turn to receive the collective savings. With help from Rooftops Canada, the co-operative later re-structured to use their acquired skills and experience to provide services to the local Housing Support Centre, which they helped to establish. They are now recognised by the Gauteng Provincial Government as a Housing Support Organisation. The co-operative has become more of a Worker Co-operative, with the emphasis on providing employment through housing construction and related activities. It is also using its experience to transfer skills to other organisations, and render services to projects that are still establishing themselves. Mazisisane now builds more than 40 houses per month for beneficiaries, making use of the consolidation subsidy under the People’s Housing Process (PHP), and has provided employment for more than 100 people from the community. The subsidy is used to pay direct labour, contractors, sub-contractors and materials suppliers. A once-off Facilitation Grant from Provincial Government was used to establish the Housing Support Centre (HSC), fund the business plan, and train a Steering Committee and beneficiaries; while operational costs are funded by a provincial Establishment Grant. At current levels of overheads and consulting fees, at least 300 dwellings per year must be built for the HSC to be viable. The project has been described as an initiative under a “community-livelihoods approach to delivery at scale of medium-density housing for low-income families in informal settlements and township-upgrade projects”. It is seen as providing poor communities with good quality affordable housing while also creating local jobs, skills and community building. The co-operative has built almost 600 houses, and currently has more than 4 000 members contributing to a savings scheme, and awaiting houses. Houses are at least 40 m2 in size, and the form of tenure is individual ownership. Construction methods used are simple and quick to learn, and certain materials such as bricks are manufactured locally by a brick-making co-operative.

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Organisation of the construction
Labour and sub-contracts
The Masisizane initiative now employs:

• Twelve Housing Support Centre staff (four full-time and four part-time adults,
and four young trainees)

• Eight brick makers • Fifty-six local construction workers (14 construction teams, each with four
workers, of which one is a fully trained and certified builder)

• Around 10 local sub-contractors (with three employees each) for glazing,
plastering, plumbing and electrical work

• An independent foundations sub-contractor who is obliged to employ and train at
least half of its workforce (about 10 people) from the immediate community Beneficiaries in some instances also provide “sweat equity”. Labour and sub-contractors are recruited by means of advertising and word of mouth, and appointed on a trial-and-error basis. Teams sign contracts for fixed prices and contract periods, but no penalties for late completion are levied. There is no UIF registration or Workmen’s Compensation insurance, and the legalities, liabilities and risks around these needs to be investigated. Teams generally provide their own tools.

Materials
Materials are ordered by the HSO, but are issued directly to the beneficiary for his ownership, and at his risk. Lost materials have to be replaced by the beneficiary. Some suppliers will not deliver to the individual sites in the township. In such cases, materials are delivered to the HSC, and the beneficiary must collect them from there. If materials are lost while on the HSC premises, the cost of replacement is deducted from HSC staff wages and salaries. Due to costs, and practical issues of insurability, there is no insurance in place to cover loss or damage of materials. This may pose too big a risk if volumes grow large, and needs to be taken up with authorities at provincial and/or national level. It is not clear if reasonable allowances for wastage are agreed upon upfront, and there is no sign of usage and wastage being formally managed through, for instance, keeping materials reconciliation records. Although materials control appears to be reasonably good at present, the co-operative is aware that it needs to develop more sophisticated formal control systems if it is to step up scale and pace of delivery.

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Execution
There are no formal work plans, overall programmes, or daily schedules. Each team is given its stand numbers, a fixed price and a time within which to complete the project. Payment is made per completed house. There is no system in place for written instructions to teams, and all instructions are verbal. This needs to be rectified.

NGO and other support
Social Housing Foundation and Rooftops Canada assist in the running of the project, including:

• Assisting the centre manager and staff in project planning • Ensuring that resources for project execution are organised • Sharpening the centre manager’s leadership skills • Helping the centre manager to motivate staff and members • Organising meetings with beneficiaries to brief them about project plans and
the implementation process

• Conducting workshops with construction teams to encourage team building,
and to brief them about the project, their rights and obligations, the contracts they need to sign, and reporting and grievance procedures

• Management and operational training of the centre manager and staff • Applying project-management principles and co-ordinating the project with the
centre manager

• Introducing proper administrative processes for keeping financial and other
records, staff administration, work procedures and accountability

• Documenting the project as a case-study and recording the lessons learnt

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Lessons learnt:
• Collective initiatives like Masisizane are good at mobilising membership and savings, but substantial additional funding and support are needed to put infrastructure and systems in place for running large-scale building operations effectively • Guard against the centralisation of power and knowledge in a single leader, or a small group. This limits capacity building, and jeopardises continuity and succession. Document every experience in easily retrievable and usable form, and do not rely on institutional memory, as gaps arise when people leave • Community-based organisations often do not fully understand the complex environment within which housing development takes place (political, legal, administrative and funding issues), and they need to be educated about these • Keep the building operations and the institutional issues of membership separate. Let the housing co-operative concentrate on mobilisation of beneficiaries, and the building co-operative focus on efficient production of quality houses while providing employment opportunities for its members and the community at large • Having little direct control over the selection, appointment and payment of materials suppliers (currently administered by a separate body employed by province) creates problems for Masisizane as the construction implementer. In order to be responsible for timeous delivery of a quality product, one needs to have effective control over all aspects of the process • Masisizane has shown that collective motivation, dedication and discipline backed-up by at least rudimentary formal systems, procedures and controls, produce good results on a smaller scale. If the scale is to be increased, though, a far more sophisticated construction management approach and system will have to be developed, and implemented and maintained by the organisation

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General Motors SA foundation – medium-density housing in the Eastern Cape
Missionvale Community Housing Initiative and Sakhasonke Village, Port Elizabeth
As in the case of Wattville/Tamboville, these projects were not undertaken as formal co-operatives, but the delivery approach was strongly based on community involvement, mobilisation, and collective self-help. Housing subsidies were pooled to direct spending towards maximum effect. The projects aimed to use the housing-delivery process as a vehicle for broader social reconstruction and upliftment through a more integrated, process-driven and beneficiary-centred approach. Skills audits were conducted in the community, and members chosen for the construction teams were sent on accredited building construction courses prior to construction. In Missionvale, the houses were built by 15 working teams consisting of 12 people each. Design was kept simple to facilitate construction by newly skilled and inexperienced builders. Costs were saved, and a new housing form for low-income housing was introduced, by increasing density through smaller plot sizes, semi-detached, row, quad, and double-storey houses, and shared-service connections.

g

Lessons learnt:
• Once-off training has limited impact. Refresher courses are necessary • Solid and continuous supervision and mentoring are needed because of low skills levels and the relative inexperience of the construction teams • No cash transactions should take place on site. It creates temptation and opportunities for corruption • Specialist trades such as plumbing and electrical work should be carried out by experienced sub-contractors • It is easy to underestimate the true costs of the co-operative approach to construction. Make sure all angles and contingencies are covered by consulting first with people with experience

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b

Badiri House, Hillbrow (high-rise inner city refurbishment)
The Badiri Housing Association (BHA) was set up by the Hospitality Industry Pension and Provident Fund (HIPPF) to provide housing for low-income workers belonging to the fund. Its first project was the purchase and conversion of the former Hotel Quirinale in Hillbrow, Johannesburg, into 126 family units. The existing building was some 12 storeys high with a small basement. The building footprint at ground floor covered the whole of the site right up to the pavement on three sides, with a narrow alley at the back for deliveries to the basement. This meant that the contractor had to place his site establishment in the building – partly in the basement, and partly in a ground floor court yard. The access alley was too narrow for larger delivery trucks, and bulk materials such as bricks had to be moved directly from the truck into the building by hand and wheelbarrow. Initially, an emerging contractor was appointed as main contractor for the work. After experiencing some difficulties with the emerging contractor (mainly around cash flow and underestimation), an established refurbishing firm was appointed to provide logistical, technical and managerial support to the emerging contractor. This did not work out either, as the managing contractor had no real interest in the job, and because his contract absolved him from most of the construction performance risk. In the end, the managing contractor’s services were terminated, and the emerging contractor was disbanded as a business and became a contract employee, assisting with supervision of a construction team that was organised along co-operative principles to complete the work. The employer bought all materials and financed the working capital requirements. A consultant provided professional construction management.

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S H F BP5 2006

Lessons learnt:
• When working in a large multi-storey building with many rooms into which workers can “disappear”, it is important to have a schedule or matrix based on the layout of the building that shows clearly who has been assigned to do what work in which unit(s). Actual performance must be noted against this matrix daily. This requires well-trained supervisors, and efficient monitoring and reporting systems and procedures • Removal of rubble and waste from this kind of building can be timeconsuming and uneconomical if left to workers, as they will constantly interrupt their own activities to carry a bucket or push a barrow all the way outside. It is better to have a small and dedicated rubble removal team roaming those parts of the building where work is taking place, on a rotating basis and according to a clear plan. Teams doing the work simply place rubble on a pile next to their work area for collection and disposal by the cleaning team, so that work can carry on uninterrupted. If possible, vertical chutes should be installed for quick disposal of rubble to the ground rather than carrying out by bucket or barrow • Work should start from the top floor down so the upper floors can be finished and locked, preventing damage caused by workers, materials and equipment moving past finished floors. This also has a positive psychological influence on the workforce: distances of moving themselves and materials and equipment around become shorter as the project progresses, and when everyone is getting tired and impatient to finish • Existing lifts and stair finishes need to be carefully protected against damage by wheelbarrows, or carrying of heavy equipment (for example, scaffold frames) or materials through the building. When work is to be done to the exterior of a building, for instance repainting, it may not always be practical or economical to erect conventional scaffolding. The alternatives are swing scaffolds or gondolas suspended from the roof, or hiring specialist “rope access” contractors. Both options are expensive and this must be taken into account when budgeting

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