CONSTRUCTION AND ENGINEERING MANAGEMENT

PROJECT DELIVERY
What is Project Delivery? Project delivery refers to the comprehensive process of carrying out and completing
projects such as the construction or renovation of a facility or building, among others. The project delivery system
requires multiple roles, standards, and a defined set of procedures to proceed.

Who is involved in the PROCESS? The project delivery system involves the following key actors: 1. Project Owner-
They are the ones who commission and fund—directly or indirectly—a construction project. 2. Designer- Typically an
architect or an engineer, they are the primary figure in the design process. 3. Contractor- They take care of the daily
operations on the construction site. 4. Construction Project Manager- They manage the schedule and budget for the
entire project on behalf of the owner.

What are the Project Delivery Phases? Whether it involves a small-scale facility or a large-scale residential
subdivision, every project goes through four phases. Here’s a walkthrough of the stages in delivering a construction
project. Planning, Design, Implementation, Delivery Close Out.

PLANNING
This project delivery phase involves developing and organizing a strategy for carrying out the project. In this phase,
the owner also decides on how the project will proceed from beginning to end. A comprehensive project plan
includes the following elements: PLANNING •Work plan and breakdown structure •Communications and reporting
structure •Risk assessment and management •Goals and objectives •Project scope •Stakeholder analysis •Schedule
plan and management

DESIGN Once the plan is complete, the process moves to the design phase. The design team develops the blueprint
and foundations according to the objectives and requirements of the project. They also present their business case,
which includes the following aspects: •Design specifications (drawings, exhibits, etc.) •Deliverables (technical,
project management, etc.) •Estimated budget and timetable

IMPLEMENTATION After the design phase, the project is on its way toward completion. In other words, the
implementation phase is where the bulk of the work occurs. Construction and monitoring often take place during
this phase. The contractors work on the job site and realize the design provided in the previous phase. The pace of
implementation will depend on different factors, such as the project goals, timetable, and any changes that the
owner requires. Project teams can efficiently carry out their tasks and complete their deliverables using a project
execution plan template.

DELIVERY CLOSE OUT

Project delivery doesn’t end when the facility is built or when remodeling or renovation work is finished. This is
where the close-out phase or project closure comes in, as the culmination of the entire process. This phase wraps up
all the tasks and activities related to project delivery, such as the following: •Assessing performance against the
goals and objects in the planning phase •Accomplishing all administrative requirements •Evaluating the performance
of project teams •Taking note of the lessons learned throughout the process

What are the Different Project Delivery Methods? ❑ Design-Bid-Build (DBB) ❑ Design-Build (DB) ❑ Construction
Manager-at-Risk (CMR) ❑ Multi-Prime (MP) ❑ Integrated Project Delivery (IPD) ❑ Job Order Contracting (JOC)

The project delivery method defines the relationship between parties involved (typically an owner, designer, and
contractor) and when and how they will fulfill their obligations and responsibilities.

Design-Bid-Build (DBB) Method The design-bid-build model is the most popular method of project delivery. In this
method, the owner hires a designer and a contractor separately. It follows a traditional sequence, and the roles
don’t overlap. Here’s an overview of the process: 1.The designer creates the drawings and specifications according
to the goals and vision of the owner. 2.Once the design is complete, the project is open for bidding. General
contractors submit their bids, and the owner selects the best one in the bidding pool. 3.The selected contractor
starts working on the project.
Pros: Owners have more control over the project, simpler to manage and lets owners secure the lowest price and
save money. Cons: Time consuming and there’s little collaboration between the designer and the contractor. Best
for: Less complex, budgetsensitive projects.

Design-Build (DB) Method Owner Architect General Contractor Design Builder The design-build has become a
popular alternative to the traditional DBB process. Instead of having a separate designer and contractor, this method
combines both functions in one called the design-builder. It reduces the lengthy time frame from the traditional
method, making it great for fast-tracking projects. Pros: More efficient, resulting in less cost and minimal risk. Cons:
Less control from the owner, as contractors make the most decisions in designing and building the project. Best for:
Time-sensitive projects that require an accelerated timeline

Construction Manager-at-Risk (CMR) In this method, the owner provides the initial design and leaves the
management details to the CM. For the rest of the process, the CM is responsible for: •Consulting designers for their
design plans •Creating the process timeline •Calculating the Greatest Maximum Price (GMP) •Tracking the budget
and not exceeding the GMP •Selecting contractors that meet the owner’s needs •Overseeing the quality of work
during construction •Coordinating any changes required by the owner Owner Designer Construction Manager Pros:
Helps lower construction costs and owners can utilize the expertise of a construction manager Cons: Disagreement
between the CM and the owner can delay schedules. Best for: Projects with limited management resources.

Multi-Prime(MP) Method This method stands out from the rest, for the owner functions as the general contractor.
They contract directly with the firms for the design and construction phases. For example, owners will reach out to
an architecture firm for designing the project and to specialty contractors for specific needs. Pros: Owners can
exercise greater control over the budget as well as the timeline, and other aspects of the entire project. Cons: Poor
coordination can then cause delays in schedule and cost valuable resources. Best for: Speeding up operations in
times of emergency.

Integrated Project Delivery(IPD) Method It places collaboration and teamwork at the heart of its operations. This
emerging method integrates the functions of designers, contractors, and other team members in optimizing project
delivery. Instead of working separately, the team joins forces even in the early stages of the process. Each of them
plays a role in the entire process, from design to construction. Everything is shared across all teams—from
information and responsibilities to liabilities and accomplishments. Pros: Improves efficiency and maximizes the
expertise of the team members in planning and management. Cons: Requires rigorous metrics for design,
engineering, costs, and other factors. Best for: Complex projects that require coordination among different
stakeholders.

Job Order Contracting (JOC) Method It is an open-ended approach allowing multiple projects to fall under a single
long-term contract. Instead of sending individual projects to a bidding process, owners gather bids from contractors
once and can then use their services as long as the contract lasts. JOC uses a catalog of pre-priced tasks known as the
Construction Task Catalog® (CTC). Contractors agree upon their rates and they are listed in the catalog, making it
easy for owners to choose a bidder and award the contract. Pros: Time-efficient and cost-efficient, Less
administrative work Cons: Create confusion and potential headaches for the owner—and slow down the project.
Best for: Small or medium-size projects and owners who complete a high volume of projects every year.

How to Choose the Right Method? Project owners need to carefully consider the following aspects when choosing
the method that will work best for their project: •Type- What kind of project does the owner envision? •Scope-
What parameters will the project encompass? •Budget- How much is the owner willing to spend? •Timeline- Will the
project proceed in a linear or accelerated fashion? Will there be overlaps in the phases? •Design- What will the final
project look like when it’s done? How will it function? •Risks- What factors can put the stakeholders in danger upon
doing the project? •Owner’s expertise- Does the company have experience in similar projects? •Owner’s control-
How much control does the owner want to have over the project?

What are the Challenges in Carrying Out Projects? •Delays in the schedule- Keep track of the progress on a single
platform. •Budget constraints- Make an accurate estimate of costs using analytics from previous projects. •Labor
inefficiencies- Create a clear, defined work plan and a technical-use specifications document in the first phase.
•Abrupt changes during construction- Make sure the project delivery plan is flexible enough to accommodate
changes. •Lack of collaboration among stakeholders- Establish a clear communication line between project
managers, designers, and contractors.
PROJECT CONSTRUCTION
is a complex process that requires careful planning, execution, and maintenance. It involves a wide range of
professionals, including architects, engineers, con tractors, subcontractors, and project managers, who work
together to bring the structure to life.

STAGES OF A PROJECT CONSTRUCTION

Project conception, design, and planning. Pre – Construction. Procurement. Construction. Post-Construction.

PROJECT CONCEPTION, DESIGNING AND PLANNING Project conception is where the first ideas of a project are
thought about before commencement into detailed design. This follows the search for the project's location and
specification of the building codes involved. Design occurs before the procurement of goods and services and before
the project begins. The architect and his team are responsible for putting the client's ideas into paper. The design
involves the schematic design, contractual agreements, and design development. After the design, the project
planner sets the project by developing a strategic plan. This is where the project is divided into smaller digestible
units making it easier to establish completion timelines.

PRECONSTRUCTION When the project planning is finalized, the design is streamlined, and the supplies and labor are
assembled. Pre-construction services are necessary for developing a formal approach in calculating costs, scope, and
schedules for project execution. The project team consists of the project manager, field engineer, contractor,
superintendent, and health and safety manager.

PROCUREMEN T The procurement stage is where the project team obtains the equipment, labor, and materials
necessary. The complexity of this stage depends on project size, expected commencement date, and availability of
resources. The general contractor awards minor contracts to the subcontractors at this stage. This stage allows
savings in the project. A contractor with a good and reliable network of suppliers or one working on several projects
at the time may save a lot based on the economics of scale. The client may also benefit from these savings
depending on the contract type.

CONSTRUCTION The construction phase is when the shovel hits the ground, transforming the empty field into a
skyscraper. It is essential to have a pre- construction meeting to ensure everyone is on the same page. The pre -
construction meeting should address: Logistics and storage Primary contract details Health and safety Quality control
Possible design challenge

POSTCONSTRUCTION The actual construction is complete, but the project has not yet been handed over to the
owner. If proper attention is not given to this phase, it can lead to many problems for the owner. All the resources
unnecessary for the project are demobilized in this stage. Rentals are returned, and the site is cleaned up.
Subcontractors that have completed their portion of work can move on to other projects. For larger projects, the
post-construction phase is a formalized process known as commissioning. Here systems are tested to ensure they
meet the specified requirements

WHY ARE THEY IMPORTANT? • • • • Construction phases are important for the following reasons: They help spread
the risk They help in project coordination They act as a guide Good for project organization Project managers and
professionals utilize construction phases to ensure they complete their duties
BIDDING & PROCUREMENT
What is Bidding in Construction? to make a positive offer to set a price in response to a call to tender

The Bidding Process. STEP 1 Request For Proposals. STEP 2 Bid Preparation Of Interested Parties. STEP 3 Bid
Evaluation And Selection. STEP 4 Contract Negotiation And Awarding.

Request For Proposals The client or general contractors send bid invitations to the contractors or the subcontractors.
The contractors or the subcontractors receive the invitation that includes: *Scope of Work *Time of Completion
*Penalty *Pre-Qualification Details
INVITATION TO BID Invitation to Bid (IB) provides information that enables potential Bidders to decide whether to
participate in the procurement at hand. The IB shall be posted in accordance with Section 21.2 of the 2016 revised
IRR of RA No. 9184. Apart from the essential items listed in the Bidding Documents, the IB should also indicate the
following: a. The date of availability of the Bidding Documents, which shall be from the time the IB is first
advertised/posted until the deadline for the submission and receipt of bids; b. The place where the Bidding
Documents may be acquired or the website where it may be downloaded; c. The deadline for the submission and
receipt of bids; and d. Any important bid evaluation criteria. Instruction to Bidders (ITB) provides the information
necessary for bidders to prepare responsive bids, in accordance with the requirements of the Procuring Entity. It also
provides information on bid submission, eligibility check, opening and evaluation of bids, post-qualification, and on
the award of contract.
BID DATA SHEET Bid Data Sheet (BDS) consists of provisions that supplement, amend, or specify in detail,
information, or requirements included in the ITB found in Section II, which are specific to each procurement.

BID PREPARATION OF INTERESTED PARTIES Contractors or Sub-Contractors download the tender document and
review the project based on their respective cost codes.

BID EVALUATION AND SELECTION. Contractors or Sub-Contractors submit their bid to the client or general
contractor.

CONTRACT NEGOTIATION AND AWARDING.

There are two types of Bidding in Procurement Open or competitive bidding- involves opening the process to bids
and tenders to obtain the best value. 1. 2. Closed or noncompetitive bidding- (sometimes called “sole source” or
“single-source” procurement) happens when the buyer eiher selects the company to buy from or restricts the
bidding process to certain suppliers.

WHAT IS PROCUREMENT? Procurement is simply the process of obtaining goods or services, typically for business.
This is no different in the world of construction, as the definition of procurement in construction is the process of
securing all the goods and services needed to bring a construction project to completion.

Six Fundametal Steps: 1 Prepare the Statement of Work (SOW) / Terms of Reference (TOR) 2 Determine the Project
Estimate. 3 Prepare bid documents. 4 Advertise. 5 Sellers submit bids. 6 Sign contracts.

I. RESPONSIBILITY OF PROSPECTIVE BIDDER AND ELIGIBILITY REQUIREMENTS 1. The prospective bidder

shall be responsible for taking steps to carefully examine all the bidding documents. 2. The prospective
bidder shall submit two (2) sets of the following legal documents in order to qualify for eligibility to bid:
a) Certified Copy of Valid PCAB License; b) Company Profile (Form I & II attached); c) Certified Copy of CY
2019 Mayor’s Permit, if not yet available, a certified copy of the application for Mayor’s Permit and proof
of payment; d) Certified Copy of Taxpayer’s Identification Number (TIN) and VAT Registration (BIR
Certificate of Registration); e) Certified Copy of Certificate of Registration with the Bureau of Domestic
Trade in case bidder is single proprietorship (DTI Certificate of Registration); f) Certified Copy of SEC
Registration Certificate and Articles of Incorporation and By-laws, if the bidder is a Corporation; g)
Financial Statements as of December 31, 2018 duly received and stamped by the Bureau of Internal
Revenue; h) Certified copy of BIR Tax Clearance for CY 2019 i) Certified Copy of PhilGEPS Certificate of
Registration; j) Proof of Ownership of minimum equipment required; and k) Omnibus Sworn Statement
(Form Attached). The bidder shall prepare his bid in two (2) sealed envelopes clearly marked “Envelope
1” , and “Envelope 2” , as follows: Enveloped 1 shall contain eligibility statement/documents as specified
above. Enveloped 2 shall contain the following: a) Bid Proposal in the prescribed form (Request for
Quotation
TYPES OF CONSTRUCTION CONTRACTS
Construction Contract. A construction contract contains general and special conditions of agreement, details of
construction project work, their specifications, time limits, payments and penalties for delivery delays, etc. and
ensures every party's rights and obligations.

Types of Documents in a Construction Contract. General Conditions. Special Conditions. Drawings and
Specifications. B.O.Q (Bill of Quantity). Letter of Acceptance. Contractor Bid.

Conditions of Construction Contract

General Conditions of Contract
1. Definition of the project
2. Contract components
3. Rights and responsibilities for the owner and the contractor
4. Project schedule
5. Payment method
6. Warranty and delay penalty

Special Conditions of Contract

They are the modifications required to suit the uniqueness of the project, make the contract flexible for the nature
of the project, and achieve project objectives.

Selection of Type of Construction Contracts

One of the characteristics of construction projects is uniqueness. Every project has its particular circumstances, so
it's crucial to select the contract type which suits the project. The owner develops the process of selecting the type
of contract.
Factors affecting the selection of construction contract
1. Project objectives
The type of contract should meet with the project objectives.
2. Project constraints
There isn't any construction project without constraints. Thus, project constraints should be considered while
selecting the type of construction contracts.
3. Project delivery method
The project delivery method determines the relationships between parties getting involved in the project and how
they interact with each other, from project initiation to project closure.

Types of Construction Contracts

There are many types of contracts used in construction. Each type has its advantages and disadvantages concerning
the owner and the contractor. They are categorized into two major groups as per the method of payment to the
contractor. The following are the types of construction contracts generally used in construction projects:
1. Lump-sum contract
2. Unit price contract
3. Cost-plus contract
4. Target cost contract

Cost-Plus Contract Contractors are paid for all of their construction-related expenses. That’s the cost part of the
name. The costs can include direct costs such as labor, materials, supplies, etc.
Design-Build Contract A design-build contract addresses design and construction costs simultaneously. Under this
type of contract, the construction process actually begins before the final design is completed. This process saves the
owner time and money by combining the design and construction project delivery into one contract. .
Guaranteed Maximum Price Contract The GMP contract limits the amount the owner will have to pay, and any
additional expenses incurred are covered by the contractor. These agreements limit the cost-risk for the customer.
They clearly define the most the owner will have to pay, which makes budgeting much easier.
Incentive Construction Contracts If the project is delivered at a lower cost and/or by the target deadline, the
contractor receives extra payment. The amount they receive is specified in the contract and may be based on a
sliding scale.
Integrated Project Delivery Contract Subcontractors typically fall under the contractor’s portion of the agreement.
The contract will tie the subcontractors to the contractor, but they will not serve as a signatory like the contractor.
Lump-Sum Contract The agreement is relatively simple and works well for projects with a well-defined scope.
They’re popular with straightforward work that doesn’t require detailed estimates. These types of construction
contracts also make administration and cash flow estimates easy.
Time and Materials Contract The owner pays an agreed-upon price based on the time spent on the project, required
materials, and the included profit rate. T&M contracts allow for more flexibility in the costs of the materials and
account for labor rates.
Unit Price Contract The unit price contract details prices per unit, which may include materials, labor, overhead,
supplies, and profit. The contract may or may not include the number of units needed to complete the project but
will likely include at least an estimate.

Estimating
Building construction estimating is the determination of probable construction costs of any given project. Many
items influence and contribute to the cost of a project; each item must be analyzed, quantified, and priced.

PARTIES INVOLVED IN ESTIMATING The parties involved in estimating and tendering can be divided into three
classes: a) The client's staff or their professional representative b) The construction contractor's personnel including
senior management, estimators, planners, buyers. plant managers, temporary works designers and site management
staff. c) The external organizations such as material suppliers, plant hire companies and sub-contractors?

The Client's Staff or Professional Representative: The contract documents prepared by the professional
representatives of clients include drawings, bill of quantities, specifications and other documents. These are the
main sources of information to the estimators who prepare the cost estimates and tenders.

The Constructions Contractor's Personnel.

Senior Management is usually involved in the decision whether or not to tender for a particular contract and in the
decision on what tender to submit. Here he considers the estimate of cost and resources involved as produced by
estimators.
Estimators are employed in the estimating department. He is responsible of producing estimates.
Buyers are usually responsible for purchasing materials and placing orders with plant hire companies and sub-
contractors. They provide quotations for materials plant hire and subcontractor.
Planners are employed to produce construction plans or programmers. The estimators are usually concerned, with a
pre-tender plan which may not be as detailed as one produced for site use. However, it will provide the overall -
duration of the project, the duration and sequence of the key activities, and approximate resource total for labor
and plant.
Plant Managers are responsible for the company's plant department and supply estimators with current internal hire
rates and advice availability of company owned-plant.
Temporary works designers are responsible for designs of major temporary works such as bridge, false work etc.
Estimators would take advice on the nature of the temporary works.
Site Management is the personnel who are employed to take responsibility for the execution of projects on site. This
expression covers agents works managers, engineers and surveyors. The contribution of site management to
estimating is to provide advice to the estimators on methods of construction.

External Organizations
Material suppliers, plant hire companies and sub-contractors all get involved in the estimating process. They receive
and respond to enquiries for quotations from con tractors.

THE ESTIMATING PROCESS

The basic steps of estimates are: Decision to tender Progress. Programming the estimate. Collection and calculation
of cost information. Project study. Preparing the estimate. Site overheads. Estimator's reports.

Decision to tender The decision to tender for a particular contract is mainly the responsibility of seniormanagement.
The decision to tender is based on such factors as: i) the company's current workload, turnover and recovery of
overheads ii) the company's financial resources iii) the availability of resources to undertake the work iv) the type of
work v) the location of the contract vi) the identity of the client or promoters and his representatives vii) a detailed
examination of the contract documents
Programming the Estimate: The two tasks that can take place in this stage are: i) collection and calculation of the
cost information ii) a study of the project to gain the required appreciation

Collection of Cost Information and Project Study. Collection of Cost Information: The cost information required by
the estimator for, labor, plant, materials and subcontractor. Project Study: i) a study of the drawings ii) a site visits
and meeting with the clients or promoter's representative . iii) the preparation of a method statement determining
how the project will be constructed.

Preparing the Estimate. The estimator is required to establish the direct cost rates for each item in the bill of
quantities. A direct cost rate is a rate for the labor, plant, materials and subcontractors but exclusive of additions for
site overhead, head office overhead and profit. This will be assessed and included later.

Site Overheads. The estimator assesses the site overheads based on requirements such as: i) Site staff ii) Clearing site
iii) Site transport facilities iv) mechanical plant not previously included in the item rates Site Overheads v) scaffolding
and gantries vi) site accommodation vii) small plant viii) temporary services ix) welfare, first aid and safety provisions
x) final clearance -and handover xi) defects liability xii) transport of men to site xiii) abnormal overtime xiv) risk

Estimator's Reports. On completion of the estimate the estimators prepare a set of reports for consideration by the
senior management. These reports contain, i) a brief description of the project ii) a description of the method of
construction iii) notes of any unusual risks which are not covered by the condition of contract or bills of quantities.
iv) any unresolved or contractual problem v) an assessment of the state of the design proves and the possible
financial consequences thereof vi) notes of any major assumptions made in the preparation of the estimate vii)
assessment of the profitability of the project viii) any pertinent information concerning market and industrial
conditions

Estimating the cost of a project requires a structured approach, but whatever method is used, the first thing is to
decide the level of accuracy required. This depends on the status of the project and the information available. There
are four main estimating methods in use, varying from the very approximate to the very accurate. These are:
1. subjective (degree of accuracy ±20%–40%) At the proposal stage, the contractor may well be able to give only a
‘ballpark figure’ to give a client or sponsor an approximate ‘feel’ of the possible costs. The estimating method used in
this case would either be subjective or approximate parametric. In either case, the degree of accuracy would largely
depend on the experience of the estimator. When using the subjective method, the estimator relies on his or her
experience of similar projects to give a cost indication based largely on ‘hunch’. Geographical and political factors as
well as the more obvious labor and material content must be taken into account. Such an approximate method of
estimating is often given the disparaging name of ‘guesstimating’.
2. parametric (degree of accuracy ±10%–20%) The parametric method would be used at the budget preparation
stage, but relies on good historical data-based past jobs or experience. By using well-known empirical formulae or
ratios, in which costs can be related to specific characteristics of known sections or areas of the project, it is possible
to produce a good estimate on which firm decisions can be based. Clearly, such estimates need to be qualified to
enable external factors to be separately assessed.
3. comparative (degree of accuracy ±10%) As an alternative to the parametric method, the comparative method of
estimating can be used for the preparation of the budget. When a new project is very similar to another project
recently completed, a quick comparison can be made of the salient features. This method is based on the costs of a
simplified schedule of major components that were used on previous similar jobs. It may even be possible to use the
costs of a similar-sized complete project of which one has had direct (and preferably recent) experience.
4. analytical (degree of accuracy ±5%) Once the project has been sanctioned, a working budget estimate will be
necessary against which the cost of the project will be controlled. This will normally require an analytical estimate or
bill of quantities. This type of estimate may also be required where a contractor has to submit a fixed-price tender,
since once the contract is signed there can be no price adjustment except by inflation factors or client-authorized
variations.

There are some tools and techniques used by professional project managers that you can use to develop more
accurate cost estimates
Expert judgment uses the experience and knowledge of experts to estimate the cost of the project. This technique
can take into account unique factors specific to the project. However, it can also be biased.
Analogous estimating uses historical data from similar projects as a basis for the cost estimate. The estimate can be
adjusted for known differences between the projects. This type of estimate is usually used in the early phases of a
project and is less accurate than other methods.
Parametric estimating uses statistical modeling to develop a cost estimate. It uses historical data of key cost drivers
to calculate an estimate for different parameters such as cost and duration. For example, square footage is used in
some construction projects.
Bottom-up estimating uses the estimates of individual work packages which are then summarized or "rolled up" to
determine an overall cost estimate for the project. This type of estimate is generally more accurate than other
methods since it is looking at costs from a more granular perspective.
Three-point estimates originated with the Program Evaluation and Review Technique (PERT). This method uses three
estimates to define an approximate range for an activities cost: Most Likely (Cm), Optimistic (Co), and Pessimistic
(Cp). The cost estimate is calculated using a weighted average: Cost Estimate = (Co + 4Cm + Cp)/6
Reserve analysis is used to determine how much contingency reserve, if any, should be allocated to the project. This
funding is used to account for cost uncertainty.
Cost of Quality (COQ) includes money spent during the project to avoid failures and money spent during and after
the project due to failures. During cost estimation, assumptions about the COQ can be included in the project cost
estimate.
Cost of Quality (COQ) includes money spent during the project to avoid failures and money spent during and after
the project due to failures. During cost estimation, assumptions about the COQ can be included in the project cost
estimate.
Vendor analysis can be used to estimate what the project should cost by comparing the bids submitted by multiple
vendors.