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Person BTEC HND in Construction & the Build Environment - Civil Engineering

The Construction Industry

Professionalism, Structures and Contracts

Student Name: D.R.D Ariyaratne

Student I.D : KTB/A-000909

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Table of Contents
Introduction.................................................................................................................................................3
History.........................................................................................................................................................3
Modern industry..........................................................................................................................................3
Literature Review........................................................................................................................................4
Company Structure..................................................................................................................................4
Types of Construction companies............................................................................................................4
Types of Contracts...................................................................................................................................5
Tendering process...................................................................................................................................5
Business Ethos.........................................................................................................................................6
Evaluation Modalities..............................................................................................................................7
Technical Bid........................................................................................................................................7
Financial Bid.........................................................................................................................................7
Assignment Brief.........................................................................................................................................8
Conclusion.................................................................................................................................................10
Bibliography...............................................................................................................................................10

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Introduction
The construction industry has developed rapidly throughout the years. The industry dates to the
ancient Egyptian era through the industrial era in the 19th century and modern technologically
advanced era. As the construction industry develops, the organizational structures along with
tendering processes to and specific legislative bodies must be followed in ensuring a proper
construction project is completed. The work environment in a company plays a great role in
maintaining a high standard with the employees, ensuring a proper business ethos.

History
Ancient Egypt during the era of the great rulers had a unique construction platform. Hard labor
was implemented on slaves to construct such structures like the pyramids of Giza. The primary
source of structural integrity for most of the constructions during this era was the usage of rock.
Rock was the more bountiful material to be used for structural strength. The organizational
structure of this magnificent period was basic. Architects engineers and construction did not exist
in union. These disciplines were all under a single “master builder”. The people of the land were
sentenced to hard labor and as reward were given bread and other food for survival.

As the world moved into the industrial revolution construction material developed and large tall
structures were constructed using steel and concrete. These two materials were the steppingstone
into the construction industry that follows until the present. This era portrayed the birth of
superstructures and skyscrapers which one can see for himself. The organizational structure
during this period also changed as specific individuals were trained to perform specific tasks.
Architects and engineers played a key role in constructing these modern marvels of the 19th
century.

Modern industry
The modern construction industry has grown in great proportion and will only grow further.
These construction companies have different structures to help govern the company towards
greater success. Adhering to various contract laws and interacting with professionalism is a key
factor in the construction industry. The industry is also unique with the different trading, and
related exchanges, offers something more profound, it mixes individual and proficient life. It
additionally gives the chance to include a various scope of abilities and interests.

Three main principle professional characters in a construction project are,

 Client/ owner
The clients are the driving force behind the construction industry as they provide the
financial support to help construct infrastructures.
 Consultant/ Architect
These are licensed professionals trained to design a plan for construction of a given
structure suggest by the client.

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 Contractor
The contractors are the lead designers who ensure the given structure is constructed in an
orderly and timely manner. The contractors oversee construction by following the
meticulous steps provided by the consultants.

Literature Review

Company Structure
Company structures play a crucial role in managing employees although before moving into the
structures first the types of construction companies in the industry. Small renovation and general
contractors, owner and builder, real estate developers, package and program builders are a few of
the many types of construction companies.

Various companies will have separate organizational structures. This can vary according to the
scale and origin of the company. Organizational structures are planned such that it accomplishes
the association's vision however formalizing employment titles, work jobs and errands divisions,
and further it characterizes how the functioning exercises can be composed successfully and
productivity. Hewage S P (2019),To name a few,

 Functional Structure
The functional structure is divided according to the specific task which is popular
amongst small family owned companies.
 Divisional structure
The divisional structure is dedicated for specific tasks which is suitable for organizations
with multiple services.
 Process structure
Process structure is based on various processes in the industry/
 Matrix structure
This structure is different as it does not follow traditional structures. This is to ensure a
more flexible and balanced decision-making skills
 Circular Structure
The circular structure is mainly for employees in the inner circle of the organization.

Types of Construction companies

 Small renovation contractors
A construction company that works on jobs with low capitol. The company performs
small changes to existing spaces with a few individual professionals.

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 General contractors
A company whose expertise is in new building or even alteration work. Most contractors
often sub-contract to complete multiple tasks.

 Owner-Builder
A large company with high capitol and ability to build large structures through same
ownership

 Professional Construction manager

This primarily refers to and individual or group of individuals who have different set of
skills to perform separate tasks such as expediters, project managers, accountants etc.

 Sponsor Builder
A construction company which focuses on government aid and builds houses or any
sponsored projects.

Types of Contracts
Before constructing any type of infrastructure, the two parties must create a contract to ensure
that all parties involved are accounted for and following the same regulatory bodies. A
construction contract is an agreement between the owner and contractor which is enforceable by
law. The main regulatory body in Srilanka is Construction Industry Development Authority
(CIDA).

A few types of contracts are as follows,

 Traditional contracts
The owner has a contractual relationship directly with the contractor and consultant.

 Management contracts
The owner will appoint an external organization to manage and coordinate separate
phases of construction. The contract is signed between the management and the work
package contractors.

 Design and build contracts

The design and build contract consist of the owner primarily selecting an organization
with designers and construction abilities to undertake a said project. Wong, S. (2017)

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Tendering process
The construction industry comprises of three types of tendering processes

 Open Tendering
The employer advertises his proposed project and selected permits to many contractors,
to the public who will then apply and submit relevant tender documents.

 Closed/ Selective Tendering

The employer advertises his project to a select few contractors and invite them to bid for
the given project.

 Negotiation Tendering
The employer invites a contractor of his/her choice to submit a suitable price for the
given project

According to the government of Queensland, Australia (2018) every year the state and its local
governments will invite the private companies to provide rather competitive bids for certain
supplies of goods and services. Although government tenders will attract a rather wide range of
companies from small family owned businesses to large scale construction companies.

A few of the main steps in a tendering process is as follows,

t Tender Presenting the

Registering the Attending of the
development bid
company’s interest
Bibliography tender session
strategy

Business Ethos
According to Good Corporation Business Ethics Debate (2011), a debate was held with the
worlds leading construction companies to discuss good practice in the industry. Corruption is a
major culprit in the industry today and ensuring these unfortunate circumstances reside is of
utmost importance.

A proper business ethos is important to ensure a reliable and profitable business in the
construction industry. A few policies which have been adhered to is as follows,

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 Safety and Quality

A high standard on safety and quality must be maintained to ensure the company lives up
to a regulation

 Honesty
Employees must be honest when given specific tasks to be completed during the
allocated time period

 Fairness
Equal opportunity must be practiced within an organization to ensure premium service to
clients. This is headed by the employer ensuring the employees are provided with
multiple tasks.

 Reliability
As employer and employee individuals should be reliable and responsible. This act
further cements an employee’s worth for the said organization.

 Accountability
Everyone should hold responsibility for their actions and account for any incorrect
situations that arise in the organization.

Evaluation Modalities
A specific point system is awarded based on scope of the project to evaluate if the project can be
undertaken by the said contracting company (fao, 2018). The tender is categorized to two bids

1. Technical bid
2. Financial bid,
Technical Bid
 Experience
Each member associated with the project will be evaluated considering their experience
in the relevant field

 Equipment and staff

The equipment age along with its sustainability for the specific type of work involved.
Site accommodation and mechanical back up in case of equipment breakdown is
considered. Proper skilled laborers for specific tasks will add more points.

 Work Programme
Points will be accumulated separately for project duration, maintaining the project
through its allotted time frame.

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 Location of contractor
The contractors located in the local area of the due project will add more points.

Financial Bid
 Cost
The lowest priced bid will receive greater points.

 The evaluation
Ensuring all staff have specific backgrounds accumulates to the points such as engineers
and local translators and technical offices

Assignment Brief

Different companies grow according to the amount of investment, work ethic and projects
undertaken. A small family owned business will have a relatively small organizational structure.
the most suitable structure for a company such as this would be a Functional Structure. The
structure will comprise of the owner along with the managing parties (usually family members).
The above company will be categorized as a C6-C7 project bearing organization. This structure
is relatively simple as it has less members. (shown below)

Father
(Director)

Child 1 (Quality Child 2 Child 3 (Future

Assurance) (Material manager) projects)

The above functional structure portrays a basic view on family owned business. Tasks are
distributed evenly amongst the members. In any company is key to establishing a good
relationship between the client and contractor is quality assurance. Secondly the usage of
material also plays a key role therefor proper material selection is a must. The last task will be
securing future projects to sustain the company for the foreseeable future.

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The above said company is need of a change in structure. the company tends to widen the scope
and attract larger projects to produce higher income. To increase business, the work culture
should change accordingly. Establishing a working environment both in the office and at the site
will enhance the proficiency of the company and lead to more income. When changing from a
functional structure the company needs to establish a different structure. therefor a matrix
structure will suffice to ensure more flexibility and improve decision making skills.

Changing to a matrix structure will have different regulations from moving up C6 to a C4-C5
project bearing organization. The need of qualified professionals are very important (Project
manager, site engineer) and hiring a quantity surveyor increases the chance of the company with
larger projects.

Chief Executive
Officer (CEO)

Managing
Director Project Director

Human Marketing Site Manager

Resources Executive

Safety Assistant
Technical
Officer engineer
Officer

Due to the company primarily focusing on private residential work, the above company structure
adheres to half head office structure (left) and project structure at the site (right). The company if
needed to widen its capabilities they should expand. The structure of the company should change
accordingly. Tenders for different categories will be decided according to the structure of the
company.

Both functional and matrix organizational structure follows a traditional contract. A direct
relationship is maintained between the client/ owner and the contractor (shown below). Due to

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the current company transitioning into the matrix structure, they will have the capacity to move
up to a C4 or C5 construction company due to the increase in capital, laborers and equipment.

Owner/ Client

Consultant Contractor

Above shows the structure of a traditional contract which the company will follow through its
transition from a small family owned business to a larger non-domestic work organization.

Conclusion
In conclusion the key entity to a successful organization is its structure and the business ethos.
Procuring tenders to accepting proper contracts with correct legislation and ensuring all parties
are involved with the project is important. Changing of a company’s organization structure helps
with its expansion and increase in profitability. The above assignment brief has specified on the
steps taken to ensure a seamless transition is followed from changing over to a simple functional
to a larger commercial non-domestic structure.

Bibliography
Pinnacleconsulting.co.uk. (2019), viewed on 27th April 2019,
https://pinnacleconsulting.co.uk/wp-content/uploads/Guide-Why-work-in-the-building-products-
sector-.pdf

Business.qld.gov.au. (n.d.). Main steps in the tender process | Business Queensland. Viewed on

19th 2019, https://www.business.qld.gov.au/running-business/marketing-sales/tendering/
capability/steps

Wong, S. (2017). “Traditional” vs. “Design and Build” Contracts: What’s the Difference? -
Asia Law Network Blog. [online] Asia Law Network Blog, viewed on 20th April 2019, <
https://learn.asialawnetwork.com/2018/07/10/traditional-vs-design-and-build-contracts-whats-
the-difference/>

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The Constructor. (2017). 3 Types of Tendering Methods in Construction, viewed on 21st April
2019, < https://theconstructor.org/construction/types-of-tendering-methods-in-construction/
6372/>

Sumanasekara, S. (2016). Review of Sri Lanka government tender procedure and standard

contract conditions, viewed on 21st April 2019, <: http://dl.lib.mrt.ac.lk/handle/123/97>

Fao.org. (n.d.), viewed on 22nd April 2019, < http://www.fao.org/3/i1531e/i1531e04.pdf>

Hewage. S, P, (2019), Company types and Tendring, viewed on 28th April 2019,

<https://classroom.google.com/c/MzI4NTc3NDEwNDRa/m/MzQ4Mjk0NjYzMjFa/details>

Hewage. S, P (2019), Structure of the organization and site staff, viewed on 05th May 2019,
<https://classroom.google.com/c/MzI4NTc3NDEwNDRa/m/MzMwMzM1NjQ1NDZa/details>

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