Construction Management Fundamentals Kraig Knutson, Ph.D. Senior Lecturer Del E, Webb School of Construction “Arizona State University Tempe, Arizona Clifford J. Schexnayder, PE., Ph.D. Eminent Scholar Emeritus Del E Wed School of Construction ‘Arizona State University Tampe, Arion Christine Fiori, Ph.D. Assstane Director of Undergraduate Programs -Myers-Lawson School of Construction Virginia Polytechnic Institute and State University Blacksburg, Virginia Richard E. Mayo, P.E., Ph.D. Late Associate Professor ‘Arizona State University Tempe, Arizona MeGraw-Hi Higher Education Boston Burr Ridge, IL Oubucue, 1A New York San Francisco St.Louis Bangkok Bogoté Caracas Kuala Lumpur Lisbon Londen Madrid) Mexico City Mian Montreal New Delhi Santiago Seoul Singapore Sydney Taipei Toronto‘thes ‘Al constuction an design orgonzasions ublih code of this to guide the behavior oftheir ‘members Ehhies Insoles doing the ight hing and rowcing he public CHA PIT ER Overview of the Construction Industry ‘The construction industry is the second largest goods-producing industry in the United States, It employs more than 6.4 milion people in craft and management positions. Construction can be broken down by type of construction into residen: tial, commercialfinstitutional building, industrial, and heavy/highway segments, Most contracts are awarded 10 a general contractor who awards subcontracts to specialty contractors, Ihe most common project delivery system used in com mercial construction, heavy/highway work, and nearly all government construc tion is design-bid-build, also known as competitive low bid; but that system is slowly being replaced by other project delivery systems suck as design-build. BUILDING YOUR FUTURE Every person entering the construction industry needs to remember that we are in the business of building things, and the most importat thing each of us will ever build is our oven reputation, Reputation building is @ one-person ja that is inseparable from issues of persoaal ethies, It requires alte work every day, No fone can build a reputation for someone else, so build yours carefully. Always ask yourself if you would be proud to read about the actions and decisions you make today in tomorrow's newspapes Philosopluers have been discussing ethics for centuries, but people in busi- ness today need to have a practical working code of ethics. Its as Aristotle taught, moral judgments are not the product of reading moral treatises and applying them to case histories. He counsels that if you need moral guidance, seek out a person who has succeeded in living a moral life rather than someone who has succeeded in memorizing moral arguments. Many students seem to believe tha the ethical standards ofthe construction industry need to be improved. Along with that perception of less than perfect this inthe industry, however, isthe fact that most who hold such beliefs have very little direct exposure to the industry, The industry is undoubtedly more Chapter 2 Overiew of he ConstnetonIncsty cthical than many tend to believe, but some improvements can be made, As in ‘ny industry if changes in the overall reputation of the industry and the prac- tices that form the foundation for that reputation are ever going to change, it js the new people coming into the industry, today's college students, who will ‘linately be the influence that causes those changes. It can safely be assumed that today’s members of the construction industry have already established their ‘own ethical codes and are accustomed tothe way the industry curently is, New entrants into the construction industry therefore carry a great responsibility for helping to raise the ethical standards ofthe industry ducing their careers, ‘The best working definition of ethics is “doing the tight thing." Those who follow the rule of doing what they believe to be right will be ethical people, People who shop for bids, a technique called bid shopping, are aware that they are engaging ina practice that is considered tobe unethical. Bid shopping means that a contractor (usually a general contractor) tells another contractor (usually a subcontractor or supplier) the amount of a third competing contractors bid, and sks the second contractor to beat the other contractor's bid because, “I would rather give the work to you.” The truth is, bids ae submitted in confidence and deserve tobe kept confidential. Bid shopping is not ethical, ‘Some owners have tied to prevent bid shopping by requiring contractors to submit their list of subcontractors along with their bid, Some cities have estab- lished bid depositories, where prospective subcontractors submit their bids, and general contractors may collect them, The subcontractor bid amounts are recorded withthe bid depository and may aot be changed. Some government agencies such asthe city of New York and the state of Wisconsin use a system of multiple prime contractors to prevent bid shopping. Certain specialty contrac- tors such as electrical and mechanical contractors submit thei bids directly 10 the government to prevent their prices from being shopped, Professional organizations such asthe American Society of Civil Engineers (ASCE), the National Society of Professional Engineers (NSPE), the American Instiute of Architects (AIA), and the American Institute of Constructors (AIC) publish a code of ethics, which their members promise to uphold. Students are ‘encouraged to visit the websites of these organizations, study these codes, and begin an understanding of the importance of ethics in one's professional lite. Contractor organizations, however, are reluctant to publish a code of ethics because the federal government may interpret policies of discouraging activities such as bid shopping as restraint of free ade, in violation of federal statutes. Even though ethics would require that we refrain from bid shopping, the law does not. Some actions may be lawful, but not ethical. There is a difference between ethics and law. Students need to know the difference, ‘There are still situations where making “under the table” payments to the right person of influence may help a company obtain work or get a proposed development approved. The AIA Code of Ethics and Professional Practice, Rule 2.201, states, “Members shall neither offer noc make any payment of a gift to a public official with the intent of influencing the officals judgment in Connection with an existing or prospective project in which the Members are imterested” All codes of ethics contain a similar statement or rule. Normally bid stopping Unethical procedure of requesting preferred ‘beonractors 2 lower ideo meet or boa bids ubmined the GC by another iia “subeontractor Specialy contractor eniming under Controt the Ge specialty contract See subcontractorPART 4 Consiucton Management there is @ guid pro quo (Latin for “something for something” or “a favor for & favor") in the exchange of money and gifts. Involvement in an unethical trans- fer of funds leaves an indelible mark on one's reputation, and there is no way to remove it. The act cannot be undone. Every studeat is encouraged to make 4 personal commitment to seek out and work for an ethical company. You will Jiow when something is simply a goodwill gift with no stings attached. You will know when your company is shopping bids and not negotiating a legitimate contract. You wil know when your actions are weong. Do the right thing. ‘The accused criminal is expected to plead not guilty. That is not an ethics issue. The politician may be expected to promise the voters anything during a ‘campaign. However, bosses expect employees to say yes when they think yes and say no when they think no, Do not say yes when you think no, Express ‘opinions honestly. Those who make a habit of saying what they think the boss ‘wants fo hear soon become redundant in theic company. Failure to be candid in {his sinuation may be an ethics issue. Bosses who do aot tolerate employees with sisseating opinions lose the opportunity to compare ideas and weaken their own leadership, Be rue to thine own self. In some ways, business ethics is different from personal ethics. There are Jhundeds of ethical questions that confroat a busines. Is it ethical ro build a project that adds to the air pollution during construction? Is it possible to avoid adding othe air pollution? Why is ar pollution 2 matter of ethics? I it ethical t0 ‘construct a facility that causes people to lose their homes unde eminent domain laws? How long can general contractors hold subcontractors” money before the abuse becomes an ethics issue? How does a company allow factors suc as race and gender to impact on hiring and firing decisions? How harmless are those free baseball game tickets? What obligations does a company have regarding continuing education for employees? How safe are the working conditions on a project? Will the completed project be safe for the public? There are hundreds of ‘questions that relate to ethics, ‘Young construction engineers and construction managers who are faced ‘with an unethical situation will normally have no problem recognizing the lack of ethics in the deal. Knowing how to handle the situation requires prior thought and a strong sense of ethical standards This text is not designed to cover the topic of ethics in detail. This introduc- tion to ethics at the beginning of the text is meant to convey the importance of the topic. If ethical, competent people will work only for ethical companies, and refuse to work for unethical companies, then companies that have unethical practices will be forced to change or they wil fal. To be an ethical person or an unethical person will always be an individual choice. Making ethical choices or accepting unethical ones is « habit, just like being early or being late is habit. Everyone can develop either habit. The authors encourage you to make 1 personal study of business ethics, place it high on your list of life goals, and develop the habit of making the proper ethical choice all the time. Jor 2. Overviwo the Contuction Init THE CONSTRUCTION INDUSTRY Construction professionals sometimes argue shout whether the construction industry is @ service industry, just as consulting, barbering, taxi service, health tare, and automobile repair ze service industries. The Bureau of Labor Sta tistis classifies construction as a goods-producing industry to separate i from the service industries, There are certain segments of the construction industry that are service businesses; for example, designers who complete studies and Aesigns for clients are providing a service. Contractors who build facilities are producing a product, just as an automobile maker or furniture manufacturer is providing a product. The most significant differences between the construction Industry and most other product industries are the size and cost ofthe product, andi custom-designed, one-of-a-kind feauces. The automobile maker and the ‘umiture maker develop their designs, produce their products, and make them svailable for customers who want to purchase them, Customers may specify ‘colors and extra features in automobiles or the fabric to be used on a piece of iumiture, but the basic product is not eligible for complete redesign or cus- ‘omization. The product required by aay construction coatract is also & man ‘actured product: a building, road, factory, church, of office building built in cesponse to the needs of the customer. Contractors must service the needs of ‘heir customers, but the product of construction is nt a serviee iti a product, 2groperly buile ia accordance with the plans, specifications, and expectations of ‘he owner. Construction in the United States can be described asa single industry, just 2s the manufacture and sale of automobiles is deseribed asthe automobile indus- sy. But construction includes more than just the work of building structures on 2 construction site. It includes the engineers and architects who do the design work, the manufacturers and distributors of the materials and equipment that 2 info the structures, the construction managers who manage the ste work, the anions and tradespeople who do the work, the municipal officials who review plans and enforce the building codes, the workers at concrete batch plants where Zonctete is proportioned for delivery to the construction ste, the workforces in ‘manufacturing facilities assembling prefabricated components that aze used in many buildings, and many, many more participants, The construction industry isso large and So multifaceted that it may be better described as a sector of the conomy instead of an industry ‘The sheer size of the construction industry defies comprebeasion. The ‘onstruction industry is about 6% of the national gross domestic product and !mploys 5% of the workers (see Fig. 21) Estimates of the size ofthe industry vary acconding to where the writer draws the boundary around the industry. In ome states where the population is growing rapidly and there is a great deal of onstruction going on to Support that growth, construction is actually more than 5% ofthe local economy and may be the largest single industry in that particular State or region. Worldwide, construction accounts for more than $4 tillio of in- lace work annually Bureau of Labor | Statistics 7 Par ofthe Deparnt of Labor Publishes ‘atari relating) labor in al incr ‘eluding consract Plans and Speicatons (Contract drowings nd writen materials deseripions, which conve he deta reguiremant tthePART 1 Corsiucton Managemant ~ Constuedon ‘Transporation 52% Mining 04% 5.3% \ pO” services le rade 29.5% 55% Finance — 38% \ _] Retail wade Government 18.3% 15.6% Manufécturing ae FIGURE 2.1. Industy size by parcontage of workers, Everyone is impacted by the construction industry, All citizens need the Construction industry. We cannot manufacture products such as computer chins ‘outdoors or in temporary facilites. We need offices and hospitals, manufactur {ng facilites and stores, roads and bridges, airport, water supply and comm cations facilities, and all the other facilites that make up the built environment. Construction has significantly changed the quality of every American's lite ‘Construction has been described as an easy in, easy out business. It is easy to get started in construction because the licensing requirements are not unifort from state to state and not difficul in most states. Neasly enyone with a pickup truck and a cell phone can get into the business, The number of people Keeping. their accounts receivable on one visor of the pickup and the accounts payable on the other is probably quite large. For very small companies in any industry, getting out is not difficult either. All ittakes is one bad year. Most construction companies are small, having only fone or two permanent employees. Such companies are generally not able 10 withstand a down year, so the number of construction companies that fail every yeat is quite large when compared to other industries, About 10,000 construc tion companies, somewhere around 1~5% of the industry, fal every year with bout $2 billion in abilities. Profit margins inthe construction industry are only about 1-2% according to many studies ORGANIZATION OF THE INDUSTRY ‘There are many ways to describe the organization of the construction industry, but it may be best to visualize it as organized around four types of construction FIGURE 2.3. Commercial constncton. projects. Owners who expect to eam a profit from the constructed facility usu ally build the first three types of projects. To fulfil a social need, the govern ‘ment usually builds the last category. Residential Construction ‘This category includes contractors and developers who build individual homes See Fig, 2.2), apartments, and assisted living faites. Builders of individual homes generally fall into two categories: those who build custom homes ind Vidually suited t9 the buyer's needs and builders of “tract” homes, offeringPART 4 Coremcton Management FIGURE 2.4 Industrial constuction standard designs and floor plans, and limited number of options or upgrade, Residential construction is generally not bid work, Builders of customs homes and apartments negotiate a price with the owner. Developers of tract homes set the price based on market conditions Commercial Construction Included in this category of construction are the ofice buildings (see Fig. 2.3), stores, schools, libraries, and other types of buildings except homes that make sp the built environment. Projecsin this category range in size from small con venience stores to multimillion dollar office buildings. Both private owners and government owners contract for buildings in this category. Private owners gen cally negotiate the price ofthe buildings, while the government agencies sox rally use alow-bid process Industrial Construction Examples of industial facilites include manufacturing plans, refineries, pipe- lines, electricty-generating facilities (see Fig. 2.4), and high-tech facilities arch ‘8s hospitals and clean rooms. Contractors who do this kind of work are special, ‘chapter 2 Overiow of ne Constuction indy FIGURE 2.5 Heavyhighway constiucton, ist in the kind of projects they undertake, and they normally negotiate the price of the work Heavy/Highway Construction In addition to highways, this category includes structures such as dams and levees, canals, water and waste waler treatment projects, bridges (see Fig. 25), railroads, and tunnels, This kind of work is usually awarded by low bid. Usually the owner is a government agency. For some projects, owners prefer to prequal- ify bidders, meaning that contractors can bid only after they have submitted to & Prequalification process to demonstrate their experience, qualifications, techni- «al and managerial expertise, and Financial expacity forthe project. PUBLIC AND PRIVATE WORKS ‘There are many ways to categorize the construction industry. One of the most con: ‘venient is to consider publi work and private work. The type of owner, pubic ot vate is key because of the procurement procedures and regulations that encum- ber the public process but have no application to private projects, Public work is defined inthis book as all work done using the public's money, That includes gov ernment at all levels, including federal, state, and local. also includes agenciesQO. ‘pubic works Ruble finde pron ‘constrtion manager Aperon who lon behalf ofthe owner, PART 4. Consucton Management such as water districts and school boards. The general rule is that public agencies are not spending their own money, but are spending money that belongs to the taxpayers. They have an obligation to spend the public's money properly. Such ‘organizations have very bureaucratic rules and procedures. For example, projects must be awarded to the lowest responsible and responsive bidder. There is oaly ‘one prescribed way to open bids, and exceptions are not allowed, There are strict rules that govern how projects are advertised. Anyone who can provide a bid boad is allowed to bid unless the project requires contractors to prequaify. There are hundreds (thousands?) of such rules and policies. They apply to all the construc. tion of inftastricture and other facilities needed by the general population, Private persons and corporations, on the other hand, are spending their own money. They are not as encumbered by bureaucracy and rules. They may open bids (or simply take proposals) in any way they select. They may decide who they will allow to submit bids. They may choose not to advertise the project at all, but to award it instead to their favorite contractor. Iis their money. They make their own rules. The majority of construction is privately funded, Public works projects receive most of the publicity, but there is more private work than public work. HORIZONTAL AND VERTICAL CONSTRUCTION Another way to categorize the construction industry is horizontal or verti- cal construction, With this categorization, che terms horizontal and vertical deseribe the direction ofthe construction. Examples of horizontal construction projects include roads, bridges, dams—those projects that are parallel to the horizon. Examples of vertical constuction include sehools, shopping centers, skyscrapers—those projects that tend t0 rise out ofthe ground. ‘Typically, the type of construction, horizontal or vertical, indicates who the lead designer is, with engincers leading the design team on horizontal-type projects and archi= tects leading the design team on vertial-type projects. PROJECT PARTICIPANTS NNo description of the industry would be complete without including the other professions, government organizations, and interested parties who are part of the total industry. Owners No construction would ever be accomplished without owners who must make the decision to build the facility, define the need, provide the financing, and ‘manage the construction process. Owners are public (government) or private. Most public owners, such as the Corps of Engineers or state departments of transportation, are experienced construction managers. Most private owners, 12. Overview ofthe Contato Industry such as small manufacturing companies, have litle or no construction manage: ‘ment expertise and depend on consultants to help them through their projects Besides providing the project funding, the primary responsibilty of the owner is to define the scope of the work, General Contractors ‘Most contracts are awarded t0 a general contractor (GC) who manages the proj- ‘ect, and subcontracts portions of the work, suchas the electrical and mechanical work, to subcontractors or specialty contractors. The primary job ofthe general contractor is to manage the job, keep it on schedule, control costs, ensure the work is well coordinated and performed in a safe manner, and coordinate with the owner on all matters since the GC is the only one of the contractors holding ‘a contact with the owner. ‘Subcontractors or Specialty Contractors ‘Subcontractors or specialty contractors make up the largest portion of the con- suction industry. They do the work. All subcontractors have a specialty such as electrical or mechanical, steel erection, acoustical, drywall and painting, and carpeting. The construction of a typical building may require 20 or more ‘subeontracirs. Designers, Architects, and Engineers Project owners select an architect or engineer (A/E) to design thei projets. The ‘owner usually selects the A/E based on demonstrated ability to design the project in the time frame available and ata cost acceptable to the owner. The designer will prepare the construction documents (blueprints, specifications, coatracts) for the project owner. Architects are usually the lead designers for buildings— vertical construction. They subcontract some of the work, such asthe structural frame and mechanical/electrica/plumbing (MEP) systems, to engineers who specialize in such work. Engineers are normally the lead designers for heavy civil and highway projects—horzontal construction. They may subcontract part ofthe work such as train stations or office buildings to an architect ‘The designer's involvement during construction will depend on the project Uelivery method used by the owner. Inthe case of a design-bid-build project, the owner may employ the designer to oversee the work of the construction con- tractor. In such a capacity, the designer will assess the quality of the contractor's work and approve progress payments. If it is necessary to issue change orders to the contrac, the designer will assist the owner in negotiating with the contractor the magnitude ofthe resulting cost and time adjustments, Construction Managers During the 1970, the term construction manager became popula. Unfortunately ‘oday, construction manager bas many different meanings. Some contractors no contac teparately witha designer and then the contactorSten shop (Chntracing business that does no rehire sion membership, PART 4 Consiucton Management call themselves construction managers. Usually they subcontract 100% of the Project work and prefer tobe involved in both the design and constuction pro- ‘cesses, They bring construction expertise to the design process. Some engineer- ing and architectural firms offer construction management services, indicating usually that they represent the owner during construction, To make the definition even more difficult, there are some government agencies that have employees ‘who are construction managers. Not all people who call themselves construction ‘managers work for constzuction contractor. ‘Trades ‘The trades consist of both union and open shop workers. The rules of employ- ‘ment vary by state and locality. The unions are organized by craft, with specific unions representing workers within a certain trade. For example, itis not dif ccultto understand that electricians, those who belong toa union, are members of an electricians’ union. The carpenters’ union is somewhat more diverse. It rep resents workers who are carpenter, pledsivers, millwrighs, tradeshow work- rs, shipwrights,exteriofnterior specialists, scaffold erectors, insulators, and related eraft workers. The specialty trades include over four million workers and ‘early two-thirds ofthe total number of construction industry workers, Labor Unions bor unions in the United States began about 150 years ago. Their inital Purpose was to improve the lives of their members. The unions are generally formed around crafts and trades, but today many uaions represent several trades, not only the one trade tha caries their name. Unions are operated by the mem” bers, ave constitutions, and are made up of locals. For instance, the carpenters ‘union, The United Brotherhood of Carpenters and Joiners of America, has over 2,500 locals. ‘The locals serve as the contract-negotiating body for their mem- bers in their local area, negotiating labor agreements that are then accepted by the “signatory companies,” meaning those that employ union workers and agree to the terms of the union's contract. Benefits to the union employers include ‘waining programs, pensions, and icing halls, Insurance Companies Contractors are required to provide bid bonds as a condition of being allowed {o bid, and then they must provide insurance, performance bonds, and payment bonds prior to award ofthe contract. Insurance companies provide bid bonds and Performance and payment bonds, and they also service the lability and property Insurance needs of contractors. The various types of insurance will be discussed in Chapter 3. Banks ‘Banks provide working capital to contractors go the contractor can pay for mae. ‘als, labor, equipment, and overhead expenses until the contractor is paid by chapter 2. Ovowiow of he Constucten indy ihe owner, Contractors eam their progress payments (usually monthly), and no up-front payments are made by the owner. The impact of this practice on acon: tractors probit and loss will be discussed in Chapter 3. Banks also provide both short-term and long. erm financing to the project owners. Suppliers Everything on a construction project, from concrete to paint, comes from sup- pliers. Many suppliers asist designers in material and equipment selection and then assist the contractors in preparing their bids, preparing shop drawings, and fabricating items specifically fo individual projects. Designers rely heavily on standard specifications and standards such as those published by the American Society for Testing and Materials (ASTM). It is most important that design- fers understand the standard specifications and design standards they are using because there are design standards for nearly every level of product quality. ‘When the owner wants a high-quality product, it is important to use a high- ‘quality standacd, Ic is equally important to ensure the quality of a construction project by using quality supplier. Permitting Agencies and Building Authorities Permitting agencies and building authorities represent the interests of public safety. This group includes federal agencies suchas the Federal Highway Admin- Unuation and the General Seevices Agency stat departments of transportation, and local agencies such as munieipal zoning boards and even home owners! asso ciations. They administer publicly funded construction projects, and they ensure private construction projects comply wich zoning laws and building codes. PUBLIC “The public is impacted by every construction contac and those impacts ean be both good and bad, Voters approve bond ists for new schools, ois, and ler publi facies. The publi then ncoveatencod while highways are widened. epi Individual member ofthe public wait while tex homes ae eon Staced. The public works ia txaporary ofces while permanent fies ae ter constuction, The American publ enjoys the best qual highways rs ences, ofcs, inasractue, and publi facies inthe wodd. The county's economy is dependent on is infastructire and bil eavizoament. Foe example, cach addtional $1 milion spent on constuction inte Unita Sales creates 4638 cow job inthe construction, supple, and sevice indus. INDUSTRY ORGANIZATIONS Most participant i the construction industry belong to one or more industry or professional associations. Membership in some of these associations is by the firm or corporation while in other cases membership is by the individualPART 4 Consicon Management American Concrete Institute ‘The American Concrete Institute (ACT) was founded in 1904. It serves as a technical and educational society, The mission of ACI is to develop, share, and disseminate the knowledge and information needed to utlize concrete to its full fest potential, The institute has produced more than 400 technical documents reports, guides, specifications, and codes for the best use of concrete and has 13 different certification programs for concrete practitioners (1) American Institute of Constructors ‘The American Institute of Constructors (AIC), organized in 1971 as the pro- fessional society for the practicing constructor, is the sponsoring organization for the Constructor Certification Program. In 1994, the AIC Constructor Cer- tification Commission was organized under the auspices of AIC to expand the constructor-qualifying process to include a written examination and to offer an internationally recognized certification process. The certification process is peet developed and is intended to set high standards for skills, knowledge, education, and conduct for the Certified Professional Constructor (CPC) [2 American Institute of Architects, ‘The American Institute of Architects (AIA) is a professional organization for archlvects in the United States, Organized in 1857, the institute conducts various activites and programs to support the profession and enhance its public image, including periodically awarding the AIA Gold Medal and the Architecture Firm ‘Awacd. American Institute of Steel Construction, Inc. ‘The American Instinute of Steel Construction, Ine. (AISC) is a nonprofit rade association and technical institute established in 1921 to serve the structural steel industry in the United States. Is purpose is to promote the use of structural stel through research activities, market development, education, codes and specifics tions, technical assistance, quality certification, and standardization (3) American Society of Civil Engineers Founded in 1852, the American Society of Civil Engineers (ASCE) represents 125,000 members of the civil engineering profession worldwide, and is Ameri- ‘a's oldest national engineering society [4] Associated Builders and Contractors ‘The Associated Builders and Contractors (ABC) is national trade association representing about 23,000 contractors, subcontractors, material suppliers, and ‘elated firms from across the country and from all construction industry special- ties. The ABC is the only national association devoted exclusively to the merit enaptar 2 Overview ofthe ConatuctonIndusry shop philosophy, the principe of providing the best management techniques, the finest craftsmanship, and the most competitive bidding and pricing strategies in ‘he industey, regardless of labor affiliation {5} Associated General Contractors of America “The Associated General Contractors of America (AGC) was formed in 1918 ata {nesting in Chicago and it was the ist major association of general contractors ‘Today the AGC has over 33,000 members, including general contractors, spe: Galty contractors, suppliers, and service providers. Historically, the association has handled wage and contrat negotiations with local building trades unions throughout the United States (6) Construction Industry Institute “The Construction Industry Institute (CTD is a research organization with a sin- gular mission: improving the competitiveness of the construction industry. The Eis a unique consortium of leading owners and contractors who have joined together to find beter ways of planning and executing capital construction pro- grams (8). National Society of Professional Engineers “The Natioual Society of Professional Engineert (NSPE) is the national soci. ety of engineering professionals-from all disciplines that promotes the ethical fnd competent practice of engineering, promotes licensure, and enhances the image and well-being of its members. Founded in 1934, NSPE serves more than 54,000 members and the public through 53 state and territorial societies and ‘more than 500 chapters, For more information visit ww.aspe.org. CONSTRUCTION LABOR FORCE “Twenty-two states ae right-o-work states, meaning that tis not legal to require ‘union membership as a condition of employment, On the average, 8.99% of the ‘construction workers in the rightto-work states belong to a union. The other ‘states are union states where the state laws permit union organization of employ: fees, and union contractors agree to hire only through the union hiring halls. Nationwide, the percentage of workers in the construction industry who are ‘union members fell from a high of nearly 80% in 1970 to about 20% today. Project Labor Agreements ‘There is a growing tend among government agencies to require project labor agreements (PLAS) on their projects. PLAs come with many different sets ‘of agreements, but the basic agreement is that contractors must hire workers nly through the union hiring halls. Ia eur, the unions agree not to strike for the duration ofthe job. By law, a PLA has no impact on a contractor’ existing project abor ‘agreement (PLA) ‘Agremen beswcen she onracior and owner fa lege project Ive workers trough the anion hiring hal exchenge for ano srk agreement rhe A wort toppage bya body of workers 10 enforce compliance with demands made om an ampoyerPART 4 Conaiveten Management employees, only on hiring new employees. According to recent court decisions, this kind of requirement does not exclude open shop contractors from bidding work. The number of union versus nonunioa contractors who successfully bid projects that are covered by PLAS does not bear out that elaim, Construction Crafts The trade unions all have very valuable training programs, which may be their ‘most notable conteibation to the industry. There are two unfortunate problems with trade union training programs that must be solved if the industry isto obtain ‘maximum benefit from the union training programs. The first problem is that they sce able to reach only a limited number of people. Craft training roquires a great deal of “hands on work. For some tools, the instructor needs to put his or her hands onto the hands ofthe student to demonstrate and teach the proper use ofthe tool, Because ofthe nature ofthe raining, the sizeof elasses must be limited. Tae Second unfortunate aspect of union craft taining isthe general lack of knowledge sbout and interest inthe craft union training programs at the high school gradu- ate Level. The result is that the industry needs more trained erftspeople than the unions ean provide. Construction company ovvners believe the top challenge fac ing the construction industry in the next five Yoars is shortage of trained labor. Labor and management need to work together to solve this problem Presented next are descriptions ofthe tasks each of the construction crafts perform. Brickmasons, Blockmasons, and Stonemasons The work of a mason varies in complexity, from laying a simple masonry walkway to iastalling an omate exterior on a high-tse building. Brickmasons and blockmasons, who often are referred to simply as beicklayers, build and repair walls, Noors, partitions, fire places, chimneys, and other structures with brick, precast masoary panels, con- crete block, and other masonry materials. Stonemasons build stone walls as well, as set stone exteriors and floors [12} Carpenters The tasks of cutting, fiting, and assembling wood and other mate- ‘als for the construction of buildings, highways, bridges, docks, industrial plants, boats, ships, and many other strictures are the responsibility of earpen- fers, Builders increasingly are using specialty trade contractors who, i tur, hire carpenters who specialize in just one of two activities. Some ofthese activities are setting forms for conerete construction; erecting scaffolding; or doing fnish- ing work, such as installing interior and exterior trim. However, a carpenter directly employed by a general building contractor often must perform a variety ofthe tasks associated with new construction, such as framing walls and part tions, puting in doors and widows, building Sars, laying hardwood floors, and hhanging kitchen cabinets [12] ‘Cement Masons and Concrete Finishers One ofthe most common and dura- bie materials used in construction is concrete, Cement masons and concrete fin- ishers place and finish the concrete. They also may color concrete surfaces; 2 Ovorow ofthe Construction industy expose aggregate (small stones) in walls and sidewalks; or fabricate concrete beams, columns, and panels. In preparing a site for placing concrete, cement ‘masons first set the forms (formwork) for bolding the conerete and properly align them, They then direct the placing of the concrete and supervise laborers who use shovels or special tools to spread it. Conerete finishers then guide a straightedge back and forth across the top of the forms to “seveed” o level, the freshly placed concrete. Immediately after leveling the concrete, finishers care fully smooth the conevetesutface (Fig. 2.6) [12] Construction Equipment Operators The machines used to move construc tion materials, earth, and rock, and to apply asphalt and concrete to roads and other sinictures are controlled by skilled operators. The operation of much of this equipment is becoming more complex a8 a result of computerized controls Construction equipment operators may also set up and inspect equipment, make adjustments, and perform minor repairs and maintenance to their machines 0 Construction Laborers. Although the term laborer implies work that requires relatively low levels of skill or training, many tasks that these workers perform require a fairly high ievel of waining and experience. Construction laborers per- form a wide range of physically demanding tasks involving building and high Way construction, tunnel and shaft excavation, hazardous waste removal, and demolition. They dig tenches, mix and place concrete, and set braces andPART 1. Consincton Management SESE 1 Suppor the sides of excavations. Construction laborers may some- tines help other craft workers including carpeners, plasterer, and muse [10) jaticians Elect is essential for light, power, aiccondioning, and ferigertion, Electrician install, connec, tet, an maintain elostieal sets {or variety of purposes, including climate contok, security, and ssa {ia}, MY #10 may install and maintain the electronic contos for equipment 112} Rar its serves many uss in modem buildings. Insulated and specially ta glss keeps in warmed or cooled air and provides good condensonen an] sound-control qualities; {ous more secure. In large commercial building, glass panels give otfee bait {nes a distinctive look while reducing the need for articialHghting, Glecies eee enatls foe selecting, euting, installing, replacing, and removing all ‘ypes of glass {12}. Talnters Paint and wall coverings make suefaces tractive and bright nade Sure Sans an ober sealers protect ouside walls from wear caused by ene saree the weather, Painters apply paint, stan, vamish, and other inher oy buildings and other stuctures (12) Fibcavers, Plumbers, Pipetiters, and Steamfitters Althnigh pipelaying, Plabing, piping, and stesmiting sometimes are considered s stale Goat, Towser Senerally specialize in one of the four areas. ipelayers lay ay cont fines, Pana £8800 pie for drains, sewers, water main, and oil bc goo spas nbers install and repair the water, waste disposal, drainage, and fas sya in homes and commercial and industrial buildings. Plumbers aise net af Plumbing fixtures, bathtubs, showers, sinks, toilets, and appliances seek os ae Fashers and water heaters. Pipefters install and repair both high aod tan, ere ne nebe Svstems used in manufacturing, inthe generation of elscricey, and in heating and cooling buildings. They also install automatic contols ae, sae ir senaly being used to regulate these systems, Some pipeiters specie Reng Stal Workers The installation and maintenance of sr condtioning heating, ventilation, and pollution control duet systems, sid conte lso may work with fiberglass and plastic mates. although rere rong teialze in fabrication, instalation, or maintenance, most docll hens jobs [12] Structural and Rei Tron-and Metalworkers Structures have frames ‘Rade of steel columns, beams, and girders In addition, reinforced coors ‘concrete containing steel ars or wire fabric—is an important mateval: Nie FIGURE 2.7. ronwcrkars acting » tinal fame bung, el srw cri, A gia, ie, win fae crave fronre increas th oo andatrasvenes of sues, Sto an fosg tnt ation aires obs seta tes por Even hgh te pinay metal inolved in hs work i ste, worker fen secon ah nora Bee oncion an begin enor mt et st Tans a ui sn vt a oe sa st ‘hfring bts, nd other matras wound te cout ste. The ss tal arter ain cntocon ss intro nds to ica ee eee byacrare.lonvorker cometh seston an seth cables odo te biting ean, ORGANIZATION OF THE CONSTRUCTION BUSINESS Architects and engineers accomplish design work. Normally for buildings, the achitect will be the lead designer, which means itis the architect who has a contract with the owner. Structural engineers, mechanical engineers, or thes may provide some design services to the architect; these engineering companies have contract withthe architec, not the owner. Usually the constuction proj- sot itself is awarded to a general contractor. This is a contractor who manages ‘he entire job, probably constructs past of the project, and subcontracts large‘molipe prime ‘Contracting stm that eliminates the ‘geuraler prime Contractor The owner oactsidldally et he pecaly lngormation (RFs) Forma docineniation sed by contactor lar contact Peprronnt PART 4. Construction Management portion of the work out to specialty contractors such as mechanical, electrical, ‘masonry, roofing, and landscaping subcontractors. The subcontractors have a contract with the general contacto, and have no contractual relationship with the owner or each other. ‘Some states and municipalities have laws permitting contracting using mul- tiple prime contractors. On some projects such as bridges, it is Beneficial to award separate contracts for different parts of the bridge. Contractors whose expertise qualifies them to build bridge pier foundations (the substructure) may not be qualified to build the superstructure (bridge deck and approaches). One of the effects of having multiple primes ona project is that the owner must perform the day-to-day management and coordination ofthe project because there is no general contractor to perform those functions. The owner must also perform the ‘general conditions responsibilities such as providing project access, clean up, office space, and utilities. Owners prefer multiple primes for one of two reasons, either to save the general contractor's markup on subcontractor work orto finish the work sooner by starting specialty contractors sooner. The down side is that the owner must intensively manage the specialty contractors, a function nor- mally done by the general contractor. Many of these owner-managed contracts finish late because ofthe owners limited experience in controlling construction work. This is nota widespread contracting system, JOB OPPORTUNITIES New college graduates who begin their careers by working for a construction Contractor often start as a projet engineer or assistant project manager. Project engineers are assigned a great variety of casks such as tacking requests for information (RFIs), managing shop drawings, maintaining the daily records of the project, calculating pay estimates, updating project schedules, and resolving ferors in plans and specifications. As project engineers gain experience, they can expect to become estimators, schedulers, and project managers. Larger com- panies have a greater ability to meet bonding requirements, which leads to & greater likelihood of working on a large project. This provides the opportunity ‘o work with a larger project team, In small companies, project engineers work ‘ith smaller projects as members of smaller project teams. Construction is a team endeavor. The job of each individual oa the project ‘eam is to make sure everyone else on the (eam always succeeds, because every- fone is essential, and the project may fll if one person is allowed to fai. There fare no jobs in construction where @ person can work alone. Teams succeed or fail as a group. Unlike some athletic tears, thece are no superstars on a fail: ing construction project team, In construction, people skills are a major key to General contractors tend to move their employees around more than spe- cialty contractors because specialty contractors self-perform work and are regionally focused. General contractors tend to follow the work. There is always chapter 2 Ovaraw of he Constucton Industry mechanical construction or electrical construction, for instance, in every city in the country so specialty contractors have less need to move people 'A second factor new graduates need to consider is the ownership ofa pro: spective company. A growing numberof large compaaies ze publily held with their stock traded in the stock market; some companies are privately held by a few individuals or a family; and some construction companies make o¥nership ‘of company stock available as people are promoted up the management ladder. ‘The impact of company ownership on an individual employee relates to areas suet as potential for bonuses or profit sharin, potential ownership, or potential yomotion imitations. All eputable companies are incorporated and licensed, Small ane- and two person companies may not be either incorporated or licensed, but they have min- imal poteaal fr hiring new college graduates, SUMMARY Each person in the construction industry must build his or het own reputation Iris the most important thing any person will eve build, Understand the differ- ‘ence between lawful and ethical. Aequire a pecsonal definition of ethics that is personally workable, such as, “ethics is doing te right thing” Temay be best to visualize the construction industry organized into four gen cul categories of coustuction. sesidewial, commerciainstiutional batlding, industrial, and heavy civil and highway. The major participants in the industry, in addition to the owners of the projects are the general and specialty contrac: tors, designers, construction managers, tradespeople, insurance companies, and materials suppliers ‘Twenty-two states are right-to-work states, But unions are strongly pushing project labor agreements with project owners. Most construction is dane on pri vate contracts, even though the public contracts gain the most attention and tend to be larger individual contracts, Most work is dane by a general contractor and specialty contractors or subcontractors. Some public agencies require a system ‘of multiple prime contract Construction isa tam endeavor. People skills are your key to success, Suc- ‘ess in your career will depend on several factors such as college and techni ‘al education, continuing education, experience and hard work, ability to be a Productive member of a project team, oral and writen communication skills, leadership ability, and ethical conduct. REVIEW QUESTIONS 2 Describe the essential differences between design-bid-build and design- ‘build, Make alist ofthe major advantages and disadvantages of each, 2.2. What are the major types of construction contractors?