Professional Documents
Culture Documents
7. Pre-bid Conference
• A pre-bid conference shall be held on any given time as
specified by the purchaser to discuss, among other
things, technical and financial components of the bid and
eligibility requirements
• Any statement made at the pre-bid conference shall
modify the bidding documents, unless such statement is
specifically identified in writing as an amendment
thereto and issue a supplemental or bid bulletin
9. Bid Evaluation
• Preliminary Examination of Bids Evaluation of bidder’s
eligibility, examination of documents and bid prices and
Clarification of bids
• Preparation of Abstract of Bids Determining the lowest
calculated responsive bid and ranking of the total bid
prices as calculated from lowest to highest and Bid
Evaluation Report
10. Award
• Preparation of Resolution to Award and Notice to Award
• Approval of Resolution to Award and Notice to Award
• Issuance of Notice to Award
• Posting of Performance Security
Module 2: Issues During Construction Phase, ISSUES IN CONTRACTS
Contracts And Specifications, Construction Contracts 1. In terms of Pricing
- Unmanaged procurement spend
I. CONSTRUCTION PHASE - Mismanaged procurement spend
The construction phase includes the physical process of 2. In terms of Conditions
building as well as all associated activities such as - Lack of clarity
landscaping, refurbishing, site clearance, and demolition. - Lack of price protection
The construction phase is the industry's backbone, but 3. In terms of Compliance
contracts must be awarded through a competitive bidding - Intellectual Property
process before construction can begin. These are some of - Buyer standards
the issues/problems encountered during this phase. 4. In terms of Supplier Service Obligations
- Confidentiality
ISSUES DURING CONSTRUCTION PHASE - Rights of access
1. Delay of Materials - Material shortages are another 5. In terms of Performance
common cause of construction delays - Metrics Deliveries on time
2. Labor Shortage Weather - Because of a shortage of - Inspection failures
skilled laborers on job sites, structures are taking
longer to complete, and some projects have been HOW TO RESOLVE CONTRACT ISSUES
canceled entirely. • Instate signature notarizations
3. Weather - The weather is one of the most common • Thoroughly review the
causes of construction delays. • Contract contact a professional contract negotiation
4. Malfunction in Equipment - Construction firm
equipment, new or old, can fail for any number of
reasons. ISSUES IN SPECIFICATIONS
5. Lack in Communication - Poor communication and • Ambiguous
ineffective communication channels can slow down • Incomplete
the transfer of information within a project and • Inconsistent
cause information blocks where information is • Out of date
transferred to the incorrect person. • Too technical
• Infeasible
II. CONTRACTS AND SPECIFICATIONS
CONTRACTS - meeting of minds between two persons THE 10 PRECEPTS TO ENSURE QUALITY OF SPECIFICATIONS
whereby one binds himself, with respect to the other, to WRITING
give something or to render some service. It is an agreement • Be complementary. • Be fair.
that gives rise to obligations. • Be concise. • Be objective.
• Be consistent. • Be organized.
SPECIFICATIONS - written documents describing in detail • Be current. • Be practical.
the scope of work, materials to be used, methods of • Be correct • Be specific.
installation, and quality of workmanship for a parcel of work
to be placed under contract. CONTRACTS DEFINITIONS
a. From a Legal Point of View:
CLASSIFICATION OF CONTRACT ACCORDING TO A mutual agreement between two or more parties that
PERFECTION something shall be done, an agreement enforceable at
1. Solemn Contract - that which requires compliance law
with certain formalities prescribed by law. (e.g. b. According to FIDIC:
donation of real property which must be in a public Contract means the General Conditions, the
instrument). Supplementary Conditions, the Specifications, the
2. Consensual Contract - that which is perfected by Drawings, the Bill of Quantities, the Letter of Acceptance,
mere consent. (e.g. sale, lease, agency). the Contract Agreement.
3. Real Contract - that which is perfected by the c. According to Method of Payment:
delivery of the thing subject matter of the contract. The agreement of how the owner will pay the contractor
(e.g. pledge). for work
Module 3: Construction Project Organization, Legal Organizational Structure
Structure, Construction Project Requirements Reflects the vertical and horizontal working relationships
among the departments, divisions, and sections.
Construction Project Organization 1. ORGANIZATION STRUCTURE "A" - LARGE PROJECTS
What is a Construction Project?
A construction project, sometimes just referred to as a
‘project’, is the organized process of constructing,
renovating, refurbishing, retrofitting, or adapting a building,
or other built asset such as a tunnel or bridge.
What is an Organization?
An organization is a group of people who work together, like
a neighborhood association, a charity, a union, or a
corporation. You can use the word organization to refer to a
group or business, or to the act of forming or establishing 2. ORGANIZATION STRUCTURE "B" - SMALL PROJECTS
something.
"E"
• Responsible for Technical Operations including field
investigation, surveys and project management services
depending on the specialization like: civil works,
architecture, sanitary, plumbing, electrical works and
mechanical works.
• Undertake the actual physical execution of works called
for in the project.
"F"
FUNCTIONAL CHART • Depending on the assigned tasks, responsibilities in
"A" implementing and commissioning certain jobs called for
• Manage day-to-day activities in project
• Provide overall direction
• Responsible for the technical performance & successful "G"
completion of the project • Normally, specialty contractors (e.g., plumbing, glass
• Engineer project expenses are within budget woks, air conditioning, elevator installation) perform
• Conduct periodic coordination meetings tasks that require skills not commonly available. Thus,
• Administer periodic evaluation of project activities and specialty contractors handle the installation, testing and
the productivity of the project participants commissioning of air conditioning units, elevators, glass
works (cladding), and the like.
• Carry out responsibilities for the preparing the procedure
for the turnover of the project when completed
Training
is the process of increasing the knowledge and skills of an
"B"
employee for doing a particular job.
• Recruit, select, hire, place complement workers Handle
timekeeping
The objectives of the training are varied depending on the
• Monitor attendance, tardiness and absences Update
requirements of the project. Enumerated below are the
personnel records
typical objectives of training:
• responsible for security services and management
1. To orient new recruits or workers;
Secure necessary licenses and permits
2. To ensure that the project engineers and workers know
• Provide messenger services exactly their tasks;
3. To improve skills, productivity, job performance and
aptitude based on acceptable standards.
CONSTRUCTION CONTRACT 2. UNIT PRICE CONTRACT
A construction contract is a mutual or legally binding Items of work of the contract are specified with estimated
agreement between two parties based on policies and quantities in the Bill of Quantities The client or owner pays
conditions recorded in document form. The two parties a fixed sum for each completed unit of work
involved are one or more owners, and one or more
contractors. For both the owner and the builder, that the ADVANTAGES
executed job will receive the specific amount of • Fair basis for competition
compensation or how the compensation will be • Lower risk for contractor
distributed. • Changes in contract documents can be made easily
DISADVANTAGES
WHY DO WE USE CONTRACT IN CONSTRUCTION? • Final cost not known form the beginning
• Describe scope of work • Unit price sometime tend to draw unbalanced bid
• Establish time frame
• Establish cost and payment provision 3. SCHEDULE OF RATES CONTRACT
• Set fourth duties, obligations and relationship Schedule of the work items without quantities is prepared
• Minimize disputes by the owner and to be rated by the contractor. Used for
• Improve economic return of investment repair and maintenance works or under conditions of
• Provide protection for parties which abide by urgency.
their obligations
ADVANTAGES
FACTORS INFLUENCING THE CHOICE OF CONTRACT • Work can be commenced earlier than if a full BOQ
TYPE has been prepared
• Price Competition DISADVANTAGES
• Price Analysis • No indication of the final price of the works
• Cost Analysis • Very difficult to determine which contractor the
• Urgency of the Requirement most advantageous offer
• Period of Performance • May cause financial problems to the owners
• Concurrent Contracts
• Allocation of Risks B. Cost Reimbursement Contracts (Cost-based Contracts)
OVERHEAD AND PROFIT
TYPES OF CONSTRUCTION CONTRACTS The contractor will be reimbursed for all the actual cost plus
TWO BROAD CATEGORIES: an agreed fee to cover his services
A. Price Given in Advance Contracts (Price-based 1. COST PLUS PERCENTAGE OF COST
Contracts) The contractor is reimbursed for all his costs with a fixed
1. LUMP-SUM CONTRACT percentage of cost to cover his services
Contractor agrees to perform job of work for a fixed sum of 2. COST PLUS FIXED CONTRACTS
money. The contractor is responsible for preparing the Bill The owner pays all costs of construction with a fixed sum of
of Quantities money . The fee is fixed and does not fluctuate with the
actual cost of the project.
ADVANTAGES 3. TARGET COST WITH VARIABLE FEES
• Low risk on the owner, Higher risk to the contractor The contractor and owner agree to a target estimate of
• Contractor will assign best personnel construction. Bonus or penalty arrangements are tied to this
• Contractor selection is easy target figure.
DISADVANTAGES 4. GUARANTEED MAXIMUM PRICE
• Contractor is free to use the lowest cost of material The contractor guarantees that he will construct the project
equipment and methods in full accordance with the drawings and specifications The
price to the owner will not exceed some total upset price.
• Contractor carries much of the risks. The tendered
price may include high risk contingency.
• Competent contractors may decide not to bid to
avoid a high-risk contract
Construction Project: Legal Structure “:A quick guide to construction projects: The legal structure
What is Legal Structure? (The key legal aspects of a construction project, including
A legal structure is an organizational framework for how a things to look out for that can go wrong.)" -PLC Construction
business entity operates. Also called a business structure, a
business form, or a business ownership structure, the What is the legal structure of a construction and
proper legal structure depends on the size and type of your engineering project?
business and your business goals. Key Legal Pillars
1. The parties
Why is it important? • The employer (also known as the client, the developer or
Every new business is required to form a business entity by the purchaser) is the person for whose benefit the work
choosing a legal structure under which the company will is carried out.
operate. • The contractor (also known as a constructor, builder or
COMMON LEGAL STRUCTURES supplier) builds the project but may also carry out design.
1. Limited Liability Company (LLC) • Professional consultants such as architects, engineers,
An LLC is a business entity that limits the liability of the project managers or quantity surveyors design and
owner(s) both financially and legally. It is a simpler type of manage the project. Sub-contractors, employed by the
operation to set up compared to some of the other possible contractor, usually carry out the majority of the physical
business categories like corporations and also provides a site works
legal distinction between the company assets and personal 2. Procurement
assets of the founders. “Procurement” in a construction project refers to the
2. Partnerships process of the purchase of goods and services from
A partnership refers to a legal relationship between two or conception to completion. It is a vital part of the overall
more people who are jointly identified in a business contract construction process. Historically, the responsibility for the
as principals. Partnership Agreements, also called 50/50 design of a project was split from the responsibility for its
Partnership Agreements, specify each party's construction. Today, “design and build” contracts where the
responsibilities within the company. Additionally, contractor both designs and constructs the project are also
partnership contracts may serve as a roadmap detailing the common.
contributions, obligations, and other partner duties. 3. Contracts
3. S Corporations • Professional institutions and trade bodies produce
A corporation is a type of business that exists separately standard form construction contracts.
from its owners or founders. It is its own entity, is usually • Employers often ask for changes to standard form
owned by shareholders, and managed by a board of building contracts, particularly as some standard form
directors. contracts favour one of the parties to that contract.
S corporations are smaller entities with under 100 Many employers use bespoke professional appointment
shareholders which don’t allow other corporations to own contracts to appoint professional consultants.
stock in the entity. Under this categorization, the business • A typical construction project also uses bonds, deeds of
can elect to have tax assessed by individual shareholder assignment and deeds of novation.
income only. This avoids the business being taxed once as 4. Insurance
an entity and again when shareholders declare their Precise and detailed insurance arrangements are a vital
personal income. component of a construction project. Employers must
4. C Corporations understand any insurance requirements imposed on them.
Most corporations are C corporations, meaning that the Usually, an employer will jointly insure the construction of a
business may issue stock publicly and company profit is building in its own name and in those of its contractors and
taxed before it is paid to shareholders, who then must pay sub-contractors.
tax based on their individual income. Other corporations 5. Legislation and regulation
may also be shareholders of a C corporation. • Health and safety legislation applies to construction
projects. The most important regulations are the
How to choose the right legal structure for your Construction (Design and Management) Regulations
construction company? 2007. These impose detailed obligations on the
CRITERIA TO CONSIDER AND EVALUATE employer.
1. owner liability • Part II of the Housing Grants, Construction and
2. expenses and procedures needed to create and run the Regeneration Act 1996 regulates payment under
business structure construction contracts. You may negotiate the details of
3. how the business will be taxed your payment arrangements but you cannot “opt out” of
4. investment needs these compulsory payment rules.
• Projects must comply with the Building Regulations. 3 Main Category of Project Requirements
• The most important construction industry-specific tax 1. Business Requirements
rules are the Construction Industry Scheme (CIS). Are the high-level needs of the business, it addresses what's
• Public bodies (and those exercising public functions, such required and why the project is happening.
as utilities) must follow EU public procurement rules. 2. Solution Requirements
Are the specific features and characteristics of the product
As a non-specialist, how do I run a construction project? or service that meet all requirements, both business and
1. Get good advice early. stakeholder. It includes both functional and non- functional
2. Give the project time requirements.
3. Accept some compromise. 3. Stakeholders
Anyone who has an interest in the product or service that's
CONSTRUCTION PROJECT REQUIREMENTS being produced or provided. They may be internal
Project Requirements - Are conditions or tasks that must be stakeholders (employees) or external stakeholders
completed to ensure the success or completion of the (customers, regulators, or suppliers). Every individual
project. stakeholder has specific needs or requirements that they
• Provide a clear picture of the work that needs to be done want to be fulfilled.
• Align the project's resources with the objectives of the
organization 6 essential permits that is needed in the Construction
• Costs and quality are considered. Project
1. PCAB LICENSE
The benefits of effectively gathering project requirements 2. SANITARY PERMIT
Cost Reduction 3. BUILDING PERMIT
• Higher Project Success rate 4. MECHANICAL PERMIT
• More effective change management 5. ELECTRICAL PERMIT
• Improved communication among stakeholders 6. OCCUPANCY PERMIT