CE403 R2 - Construction Management

6/17/2019
Construction Management
Introduction to Construction Management
Activities of a Construction Company
CE403 – Construction • Construction companies operate their business
Management to earn a profit by providing a valuable service.
(Slides Set No.2) • They bid or negotiate for work to earn a profit.
• To be successful, they must know how to
By • Estimate the cost of construction projects
accurately
Dr. Pujitha B. G. Dissanayake • Predict the schedule of work
Department of Civil Engineering • Control the progress and expenditure during
Faculty of Engineering construction
University of Peradeniya • Complete projects safely on time.
1 CE403 - Construction Management 2
Construction Management Construction Management

Introduction to Construction Management What is Construction Management?
Activities of a Construction Company • Construction Management is a professional
• They have a responsibility to construct the management practice consisting of an array of
project in accordance with the plans and services applied to construction projects through
specifications the planning, design, construction and post
• Satisfy the client’s cost, quality and time construction phases for the purpose of achieving
expectations. project objectives including the management of
quality, cost, time and scope.
CE403 - Construction Management 3 CE403 - Construction Management 4
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Construction Management can be addressed on Construction Management can be addressed on
several levels several levels (cont.)
• Owner / Client - The owner of the project has • At the site – At site level, the construction
some key construction management functions such management functions are setting the standards for
as defining scope of the project, planning and quality and safety, planning the sequence of
financing the project and ensuring the project team construction, controlling progress and
understands the project goals. expenditures, communicating effectively with the
• Construction Company – At the level of the owner and the architect/engineer, coordinating the
construction company, the construction work of the subcontractors, managing submittals,
management functions such as selecting the right managing change orders, submitting periodic pay
jobs to bid, preparing the cost estimate and estimates and closing out the project.
submitting the bid, procuring the payment and
performance bonds, scheduling the work and
securing project operating capital.

Life of a Project Life of a Project
• Scope Definition • Scope Definition (cont.)
• This is the first major activity and the most • The scope definition will set the design
important responsibility of the owner in the objectives for the designer.
entire process. • In the scope definition phase, the owner
• The owner-defined scope of the project which determines exactly what kind of a facility will
the owner defines with the help of the be built.
architect/engineer/construction manager will • The purpose of the facility to be built must be
ultimately be the controlling factor on the clearly defined by the owner.
schedule and budget for the works to be carried • It is much easier and much less costly to make
out. changes early in the planning or design phase
than at a later time.
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• Scope Definition (cont.) • Planning Phase
• Project Planning is also a function that is
primarily the responsibility of the project
owner.
• The owner has several responsibilities that must
be accomplished during the planning phase:
i. Select the designer
ii. Define the project goals
iii. Ensure the availability of sufficient funds
to complete the project

• Planning Phase • Planning Phase
iv. Obtain project site zoning changes if • The owner’s goals are always essentially the
necessary same,
v. Select and purchase the project site • to produce a quality facility
vi. Perform environmental impact studies • within budget
and obtain all permits • on time in a safe manner.
vii. Determine construction procurement
system and the form of construction
contract to be used
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• Planning Phase • Planning Phase
• The owner must provide the most accurate • Designer Selection
possible guidance to the designer for • project owner will select an architect or
• project budget engineer to design the project and then
• type of facility advertise the project for bids after the design
• owner’s priorities
documents have been completed.
• The owner should select the architect /
• quality standards.
engineer based on demonstrated ability to
• The owner must make financing arrangements design the project in the time frame
prior to the award of a construction contracts. available and at a cost acceptable to the
owner.

• Planning Phase • Design Phase
• Designer Selection • The primary requirement for any facility is that
• The architect / engineer will design the it must be safe and all other requirements of
project in accordance with the local building and preferences of the owner should be
codes and other applicable regulations. reflected in the design.
• The designer do not and should not begin • To ensure that facilities are safe, local
work until they have a contract. jurisdictions have instituted building codes and
other regulations.
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• Design Phase • Design Phase
• As the design progresses, the owner and the • During this period design reviews will be
architect / engineer will schedule design conducted to ensure that owner and the
reviews during which the architect / engineer designer have mutually understood the scope
will ensure that the design meet the owner’s and progressing together.
expectations. • This will ensure that no late changes to the
• There would be three stages namely, design are required which can cause extra cost
• concept design stage –initial design ideas and lost time.
• scheme design stage - develops the concept, • The owner has a responsibility to ensure that
taking on board more functional and practical the design drawings are reviewed by the
considerations. operation and maintenance staff that will be
• detailed design stage – further development of living with the facility after the completion.
above. CE403 - Construction Management 17 CE403 - Construction Management 18

• Bid Phase • Bid Phase
• At the time of the bidding phase the owner has • The factors that contractors would consider in
fully committed to the project and has the deciding whether or not to bid for a particular
funding and the design has been completed. project would include.
• From the point of view of the contractor, the i. Location of the work
first step is to decide whether or not to bid for ii. Identity of the owner
the job. iii. Availability of key company personnel
iv. Experience in the type of work to be
carried out.
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v. Whether or not there is financing for the • They would bid for work they are familiar and
project. the work their staff can accomplish
vi. Size of the project. successfully.
• Companies would like to work in locations • They would also not want to attempt projects
where they normally work because they have that are drastically larger in scope than their
established relationships with sub contractors previous projects.
and the providers of material and labour. • If they violate one of the criteria of location,
• They would also like to work for owners whom owner, availability of key personnel or project
they are familiar. size, the risk of a bad job is increased.

• If a construction company decides to bid for a • In preparing a bid, contractors must consider
project, the process of estimating their own the cost of equipment, labour, material,
work and collecting quotations from subcontractors, job and company overheads,
subcontractors begins. contingency and profit.
• Bid preparation is expensive and companies do • They should also consider the number of
not make bid / no bid decision casually. competitors on similar projects.
• A general contractor will collect quotations • Statistically, there is no profit in bidding jobs
from subcontractors and material suppliers and with 12 or more competitors on similar projects
estimate the costs of portions of the works it (according to a study in USA).
will build itself. • Any contractor can bid to get the job, but
successful contractors bid to earn a profit.
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• Much of the work of preparing a bid consists of • They then decide on a bid amount to submit
soliciting and collecting quotes from and that decision is made as close to the bid
subcontractors and suppliers. submission deadline as possible.
• Companies will estimate their own costs for • Contractors work with their sub-contractors
materials labour and equipment, assemble the right up to the bid submission time to ensure
subcontractor and supplier quotes, add their job they have the best price available.
overhead and indirect costs, add contingency if
necessary and add profit.

• Award Phase • Award Phase
• The award phase consists of two kinds of • Some owners require general contractor submit
activities, those that are owner requirements a list of subcontractors, either at bid opening
and those that the successful bidder needs to time or within a designated number of days
accomplish to prepare for the work. after the bid opening.
• The owner will require the submission of • A detailed project schedule is required,
properly executed payment and performance normally during the award phase or
bonds and evidence of worker’s compensation immediately after contract award.
and liability insurance. • The project schedule will form the basis for
control of the project and progress payments to
the contractor.
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• The contractor cannot begin the work until the • job access, location of the site office,
Notice to Proceed is received. storage areas and final selection of
• The Notice to Proceed documents the subcontractors and suppliers.
contractor’s legal access to the site and • A cash flow analysis should be completed to
establishes the official start date of the work. determine how much cash is needed and at
• Prior to issue of the Notice to Proceed, the what time, based on the project schedule.
contractor will carry out preplanning work that • A detailed project schedule is prepared within
will include decisions on matters such as, the specified period, which must be submitted
• construction procedures to the owner for approval.
• type of equipment to be used • The work breakdown and the pay schedules are
planned based on the project schedule.

• The award phase ends after the owner and the • The owner has an obligation to provide the
contractor have signed the contract and the contractor with the plans and specifications that
owner issues the Notice to Proceed. describe the contract in such detail that
• After the construction contact is executed, the completion of the project in accordance with
general contractor enters into subcontracts with the plans and specifications will produce a
sub-contractors and these subcontracts should project that meets the owner’s needs and
incorporate the same terms as the contract expectations.
between the owner and the general contractor.
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• Construction Phase • Construction Phase
• Forming of the Project Team • Forming of the Project Team
• The key concept in the management of a • A detailed list of tasks should be prepared and
construction project is to organize the project grouped into phases that show the sequencing
around the work to be accomplished. of tasks and the interdependencies of work.
• After the review of all backup material from the • This will assist in the selection of resources and
owner and all other information that is known the technical expertise that will be required for
about the project, the project manager should the project team.
develop a preliminary Work Breakdown • A time schedule should be prepared for each of
Structure that identifies the major tasks that these tasks. All these preparatory work needs to
must be performed. be done in order for the project manager to
form the project team

• Forming of the Project Team • Forming of the Project Team
• After this preparatory work is complete, the • The number of team members will vary with
project manager is responsible for organizing the size and complexity of the project.
the project team to achieve the objectives.
• The project team consists of members from the
various discipline departments (architectural,
civil, structural, mechanical, electrical, etc.),
project controls (estimating, planning and
scheduling, quality control, etc) and the owners
representative.
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• Contractor’s project Team • Contractor’s project Team
• The job of the construction project team is to • The job of the construction project team is to
construct the facility construct the facility
• in accordance with the terms of the contract • coordinate activities of subcontractors
and any change orders • accomplish job administrative requirements
• order right materials and equipment such as requests for information (RFIs)
• communicate clearly with the owner and • shop drawings and change orders
material suppliers and subcontractors • prepare monthly interim payment
• maintain a safe construction site requisitions
• provide timely decisions

• The job of the construction project team is to • The project manager (PM) is the overall in-
construct the facility charge of the project, responsible for the
• accept the responsibility for the performance • rate of progress
of the contract. • financial control
• Above all, the primary objective is to • safety and ultimate profitability of the job
complete the project on time, to the required • availability of materials, supplies,
quality standards in a safe manner at a equipment, labour and subcontractors
profit.
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• Construction Phase
• Construction Phase
• Contractor’s project Team
• Contractor’s project Team
• The contractor submits the RFIs (Request for
• The PM will select equipment needed on
Information) in writing and responses are also
site received in writing and are incorporated in the
• negotiate the contracts as-built drawings.
• submit progress and financial reports to the • RFIs are used by the contractor to document
company guidance from the architect, engineer or the
• responsible for all communications with the project manager regarding the issues that may
owner. not be clear in the drawings.
• The as-built drawings are completed by the
contractor as work progresses and will be
CE403 - Construction Management 41
submitted to the owner at the end of the project. 42
CE403 - Construction Management

• Shop drawings are used to obtain from the • These connections require the approval of the
project designer specific approval of the structural engineer.
materials to be installed. • The first job assignment of a new engineering
• For mechanical equipment this may require graduate on a construction project will most
approval of the manufacturer’s make and likely be a project engineer / site engineer, who
model. will be assigned responsibility for documents
• For structural steel, the engineer designs the such as daily reports, progress reports, concrete
beams and the columns but the fabricator is quantity calculations, RFIs and shop drawings.
responsible for the connections.
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• Contractor’s project Team • Owner’s Project Team
• New project engineers must spend most of their • The owner will be represented on site, and like
time and effort learning how a facility is built. the contractor, the size of the owner’s project
• The new engineer must learn the sequence of team will depend on the size and complexity of
work, the working relationships on site, the the project.
capabilities of the tools and equipment, the • For a small building project, the architect might
methods of controlling schedule and cost, the visit the site and consult with the contractor
flow of information and the functions of the weekly.
subcontractors.

• Owner’s Project Team • Owner’s Project Team
• The architect would report progress to the • The resident engineer or a senior resident
owner, review shop drawings, negotiate change engineer would be the overall in-charge of the
orders, respond to Request for Information owner’s site team.
(RFIs) and approve progress payments. • The resident engineer will have the authority to
• In the case of a large project, such as a highway make engineering decisions, stop work in the
project, the team will comprise resident event of unsafe conditions, order and approve
engineers, inspectors, surveyors, quality and change orders, approve progress payments,
safety assurance officers, etc. negotiate change orders, respond to RFIs and
report to the owner.
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• Kick-off Meeting • Kick-off Meeting
• After the formation of the project team, the • The kick-off meeting allows the team to set
Project Manager calls the first team meeting, priorities, identify problem areas, clarify
commonly called the kick-off meeting. member responsibilities and to provide general
• It is one of the most important meetings in orientation so the team can act as a unit with a
project management and is to get the team common set of goals.
members together to identify who is working • At the meeting the project manager will present
on the project and to provide them with the project requirements and the initial work plan,
same base of knowledge about the project so discuss working procedures and establish
that all feel they are part of the team. communication links and working
relationships.

• Construction Phase • Operations and Maintenance Phase
• Kick-off Meeting • Once the project is operational, it must be
• Every effort should be made to eliminate any maintained for its lifespan.
ambiguities or misunderstandings related to • A maintenance contract with the manufacturer
scope, budget and schedule. or a qualified firm is a common way to provide
• These three elements of a project cannot be maintenance.
changed without the approval of both the • Operating costs also include warranties,
project manager and the owner’s representative. administrative fees, insurance, property taxes,
land-lease payments and a contingency fund for
unforeseen problems.
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6/17/2019

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