CONSTRUCTION MANAGEMENT

Construction project management (CPM) is

the overall planning, coordination, and
control of a project from beginning to
completion.
CPM is aimed at meeting a client's
requirement in order to produce a
functionally and financially viable project.
 CONSTRUCTION MANAGEMENT
ARC 813
• SYLABUS:
• (1) Production Planning and Control-Bar Chart, Critical Part Method
(CPM), Performance Evaluation and Review Techniques (PERT),
Line of balance etc.
• (2) Coordination, control and supervision of projects.
• (3) Sites - Site layout, site management practices, reporting to
management etc.
• (4) Building management procedure from inception to completion.
• (5) Work study and productivity studies- method study, time study
and activity sampling incentives etc.
• (6) Working capital – cash flow and funds Budgetary control, cash
flow, financial ratios and statement for the construction industry,
personnel administration in the construction industry.
 Production Planning and Control
• Planning is the spine or the anchor of the
whole project and must be based on
clearly defined objectives, see figure 1.
• With proper planning, adequate
resources are time is allowed for each
stage in the process, and all the various
component activities at the appropriate
times.
• Planning should include:-
• (1) Forecasts of resources requirements of
people, materials and equipment analysis
for their most efficient use;
• (2) Forecasts of financial requirements;
and
• (3) Provision of “milestones” against
which progress can be measured.
 Participants
• The project manager will be responsible for
the planning process during all stages of the
project.
• He and his team will be assisted during
briefing, designing, tendering, constructing
and commissioning by others.
• The five major groups of people involved are
the client, users (anticipated end users),
designers, executors, public authorities and
agencies in a building project.
 Principles of Planning
• Planning techniques or controls range from bar charts to
computerized network analysis. All planning techniques are
based on certain important principles:-
• (1) The plan should provide information in a readily
understood form, however complex the situation it describes;
• (2) The plan should be realistic; there is no point for example,
in planning a building to be completed in six months if the
delivery period for cement for that construction is five months
away;
• (3) The plan should be flexible. Circumstances will almost
inevitably change during the constructing stages. It should be
possible to after certain elements without disrupting the entire
plan;
• (4) The plan should serve as a basis for progress monitoring
and control;
• (5) The plan should be comprehensive. It should cover
all the stages from briefing to commissioning.
• It is a common misconception that planning is
necessary only for actual construction.
• Even on a small project the time between the decision
to build and the taking-over of the complete works is
often two or three years (depending on its magnitude).
• Out of this period, only nine months or a year may have
been spent on physical construction.
• On a large and complex project the proportion of total
time spent on building may be as low as 20 or 25
percent.
• The rest of the time will have gone on planning
permissions, compliance with statutory requirements,
financial authorization, design tendering and so on.
• It is therefore essential to plan the total project period.
 Planning Techniques or Controls
• The main techniques used for planning
building projects are:-
• (1) Bar charts, sometimes known as Gantt
Charts;
• Network analysis, sometimes known as
critical path methods (CPM) or
programme evaluation and review
technique (PERT).
 Bar Charts

• Most projects, however complex start by

being depicted on a bar chart.
• Even when a more sophisticated
technique is necessary for detailed
planning, the results are often shown in
bar-chart form.
• The principles are very simple, see figure
2.
• The following steps are taken:
• 1. A list of project activities is prepared;
• 2. The time and resources needed for
each activity are estimated;
• 3. Each activity is represented by a
horizontal bar drawn to a time-scale;
• 4. Activities are plotted on a chart with a
horizontal time-scale. It is then possible
to see when they are planned to start and
end.
 CRITICAL PATH ANALYSIS
(Activity-on-arrow method)
• As with bar charts, the first step is the preparation
of a list of project activities.
• However, an important difference from bar charts is
that estimates of the time and resources needed for
each activity are not usually made at this stage.
• Instead, each activity is represented by an arrow, but
not to a time-scale.
• The tail of the arrow represents the start of an
activity and the head its end.
• The arrows are then arranged to depict the logical
sequences of activities, thus producing a network as
shown in figure 3.
• Note: The activities are linked by circles,
called “event” -
• This signify that all the preceding activities
have been completed and that all subsequent
activities may start.
• It is only at this stage that estimates of
duration and resources for each activity are
added.
• It then becomes possible to calculate the
shortest time needed to complete the project
and the sequence of activity necessary to
achieve this.
• This is known as the critical path method.
 COORDINATION, CONTROLS AND
SUPERVISION CONTROL
• Control is an integral part of the construction
management process.
• It aims at the regular monitoring of achievement
by comparison against planned progress.
• When deviations from planned progress occur,
plans may have to be changed.
• Time is all-important, and the control process
should aim at the early discovery of any departure
from the planned course, so that adjustments can
be made in time to be effective.
• See figure 4.
 The Control Circle

• The control cycle is shown in figure 5.

• It is a continuous process throughout the life
of the project.
• Since it is very rare for any project to proceed
exactly as planned.
• Control information provides a basis for
management decisions, and the following
requirements should be satisfied by an
effective control system:
• 1. It should draw immediate attention to significant
deviations from what was planned;
• 2. True and meaningful comparisons must be
possible;
• 3. The information should indicate what corrective
action is necessary, and by whom the action should
be taken;
• 4. It should be expressed in a simple form so that it
is readily understood by those who have to make use
of it;
• 5. Key areas of control must be chosen with care,
so that the results of control are worth the time and
effort expended.
 TIME, COST AND QUALITY CONTROL

• There are three elements to be

controlled in a construction project –
• 1. progress against time,
• 2. cost against tender or budget and
• 3. quality against specifications.
 Time Control
• The project manager should prepare a time-schedule
for the whole project during the briefing stage.
• Although lacking in detail, this will provide basic
control information, such as the planned completion
dates for each stages.
• As the project progresses information will become
available from which a more detailed plan can be
prepared.
• Thus, by the end of the briefing stage it should be
possible to prepare a detailed work plan for the
designing stage,
• showing not only when activities are to be
completed but also the resources required.
• Similarly it should be possible to prepare
a more detailed schedule for the
constructing stage well before completion
of the designing stage.
• Although the illustrations show bar
charts, for large and complex projects it
may be necessary to use network analysis.
• The required completion times for the
constructing stage should be written in the
contract documents. Since they may have
an important bearing on the tender price.
• During the constructing stage it is the contractor’s
responsibility to prepare a detailed work plan
which meets the requirements of the contract.
• The project manager should assess the realization
of the contractor’s schedules especially as regards
availability of resources.
• It is the responsibility of the main contractor to co-
ordinate the work of his subcontractors,
• but there may be suppliers, or indeed other main
contractors,
• whose activities the project manager must co-
ordinate.
• The tools for progress control are the bar
charts or the critical path networks.
• Whichever technique is used, the project
manager should take the following steps:
• 1. Establish “targets” or “milestones” – times
by which identifiable complete sections of
work must be completed.
• One such target would be the completion of
sketch plans during the designing stage, or the
completion of all, works to render a building
watertight so that equipment may be safely
installed.
2. As each target even occurs, compare actual
against targeted performance. For example,
were the sketch plan completed on the date
planned, or two weeks before, or one month
after?
3. Assess the effect of performance to date on
future progress.
4. If necessary, re-plan so as to achieve original
targets or to come as near as possible to
achieving them;
5. Request appropriate action from those
directly responsible for the various activities.
• Planning and Control
Techniques achieve nothing
unless they are translated into
action and
• it is the responsibility of the
project managers to see that
this happens.
 Cost Control
• The aim of cost control of a construction project should
be the active control of the final cost to the client, not
merely the passive registration of payment.
• (1) The Project Budget
• A carefully prepared budget is vital for the effective
control of project costs.
• It is also essential that it should be consistent with the
aims of the project and the required functions and
quality standards.
• A decision on the project investment costs should be
taken only after the preparation of a reliable cost
estimate.
• The project budget should be prepared according
to an accounting plan.
• The choice of accounts and the level of detail will
depend upon the client’s information needs and the
control requirements.
• When the project is being executed for a private
client, the budget including costs for the briefing
and designing stages and general costs, such as
service connection charges.
• The account is based on the estimated cost, with an
addition for contingencies.
• The sum of individual budgets, accounts gives a
total which is exclusive of price escalations and
contingencies.
• To deal with general contingencies, a
reserve fund may be budgeted for at
the discretion of the client.
• This fund would cover such things as
changes in the conditions upon which
the budget was based,
• and would be used only with the
client’s specific approval.
• Cost control should aim at ensuring that the final
cost of the project does not exceed the budget.
• The greatest possibility for influencing the final
project cost is in the briefing and designing stages.
Regular cost checks should therefore be carried out
on the developing design.
• A good aid in this work is a cost plan, based on
approximate cost estimate, indicating the quality,
quantity and unit prices for major cost elements
such as earthworks, floors and roofs.
• When the design is developed in further details, it
is possible to check that the design of each element
is kept within the framework set out in the cost
plan.
• An essential aid to cost control, is a
forecast of the final cost, which is
regularly revised to reflect the current
state of the project.
• If deviations between this forecast and the
project budget are observed, corrective
action must be taken.
• A good aid to keep the cost forecasts up
to date is a “cost diary” for each account,
in which all events influencing the final
• These diaries should include such
information as:
• 1. Cost checks prepared during the designing
stage.
• 2. Contracts with consultants, contractors,
suppliers and organisations;
• 3. Variation orders, and variation foreseen.
• 4. Expected cost changes due to disturbances
in the planned progress of the works; and
• 5. Differences between the actual and the
indicated quantities and price fluctuations.
 Site Control
• The principal participants at the construction
stage are the project (construction) manager
and the contractor.
• On a large project the contractor may appoint
a supervisor whom he may also call a project
manager so there is often confusion regarding
the roles of these two main participants.
• The client’s representative who is responsible
for managing all or overall stages of a project
is referred to as the project manager.
• The construction industry is composed of
five sectors: residential, commercial, heavy
civil, industrial, and environmental.
• A construction manager holds the same
responsibilities and completes the same
processes in each sector.
• All that separates a construction manager in
one sector from one in another is the
knowledge of the construction site.
• This may include different types of
equipment, materials, subcontractors, and
possibly locations.
 THE ROLE OF A CONTRACTOR
• A contractor is assigned to
a construction project once the design has
been completed by the person or is still in
progress.
• This is done by going through
a bidding process with different contractors.
• The contractor is selected by using one of
three common selection methods: low-bid
selection, best-value selection, or
qualifications-based selection.
• Contractor refers to the person
responsible for the construction works
only.
• However, it is important that the project
manager should understand the way in
which a contractor handles a building
project.
• Subcontractors are persons are given
certain special aspects of a contract that
the main contractor in some cases does
specialize in.
 The Role of the Project Manager
• He is responsible for overall control of the project.
• On a project large enough to justify a full-time
management team, he may be assisted by a
quantity surveyor dealing with financial control,
and a clerk of works, dealing with site progress
and quality control.
• It may also be necessary to have specialist to help
with the control if complex electrical installations
or mechanical equipment are involved.
• The project manager often has to control by
persuasions rather than by direct exercise of
authority.
• The project manager can control site
operations only within the conditions of the
contract.
• In the “standard approach” this means that he
should record progress and notify the
contractor if he is behind schedule.
• He can also through the clerk of works,
control quality against the specifications.
• His control over the client’s cost is limited to
ensuring that variations from the contract
drawings and specifications are minimized and
that valuations are correct.
• A construction manager should have the
ability to handle
• public safety,
• time management,
• cost management,
• quality management,
• decision making,
• working drawings, and
• human resources
 PUBLIC SAFETY
• Public safety organizations include Law Enforcement,
Fire Service.
• The public safety issues a municipality, local
government, state, or federal jurisdiction might grapple
with include narcotic use, trespassing, burglary,
harassment, juvenile delinquency, unauthorized living,
noise, littering, inappropriate social behavior,
inebriation, and other quality of life issues.
• Generally organizations are involved in
the prevention of and protection from events that
could endanger the safety of the general public from
significant danger, injury, or property damage, such
as crimes or disasters (natural or human-made).
 TIME MANAGEMENT
• The major themes arising from the literature
on time management include the following:
1. Creating an environment conducive to
effectiveness
2. Setting of priorities
3. Carrying out activity around prioritization.
• The related process of reduction of time spent
on non-priorities
• Incentives to modify behavior to ensure
compliance with time-related deadlines.
• Time management has been considered to
be a subset of different concepts such as:
• Project management: Time Management
can be considered to be a project
management subset and is more
commonly known as project planning and
project scheduling.
• Time Management has also been
identified as one of the core functions
identified in project management.
• Organizational Time Management is the
science of identifying, valuing and reducing
wasted time within organizations.
• Organizational Time Management identifies,
reports and financially values sustainable time,
wasted time and productive time within an
organization
• and develops the business case to convert
wasted time into productive time through the
funding of products, services, projects or
initiatives at a positive return on investment.
 Setting priorities and goals
• Time management strategies are often associated with the
recommendation to set personal goals.
• "Work in Priority Order" - set goals and prioritize
• "Set gravitational goals" - that attract actions automatically
• These goals are recorded and may be broken down into
a project, an action plan, or a simple task list.
• For individual tasks or for goals, an importance rating may
be established, deadlines may be set, and priorities assigned.
• This process results in a plan with a task list or a schedule or
calendar of activities.
• Individuals may recommend a daily, weekly, monthly or
other planning periods associated with different scope of
planning or review. This is done in various ways, as follows.
 COST MANAGEMENT
• Cost accounting provides the detailed cost
information that management needs to control
current operations and plan for the future.
• Since managers are making decisions only for their
own organization, there is no need for the
information to be comparable to similar
information from other organizations.
• Instead, information must be relevant for a
particular environment. Cost accounting
information is commonly used in financial
accounting information, but its primary function is
for use by managers to facilitate making decisions.
• All types of businesses, whether service,
manufacturing or trading, require cost accounting to
track their activities.
• Cost accounting has long been used to help
managers understand the costs of running a
business.
• Modern cost accounting originated during
the industrial revolution,
• when the complexities of running a large scale
business led to the development of systems for
recording
• and tracking costs to help business owners and
managers make decisions.
• In the early industrial age, most of the costs
incurred by a business were what modern
accountants call "variable costs"
• because they varied directly with the amount
of production.
• Money was spent on labor, raw materials,
power to run a factory, etc. in direct
proportion to production.
• Managers could simply total the variable costs
for a product and use this as a rough guide for
decision-making processes.
• These forms of contract are more likely to have their
own ‘’tailored’’ methods and forms for payments to
the contractors,
• but set out below are the more common methods of
payments for traditional or design and build
contracts.
• 1. Valuations
• The traditional method of payment has been a
physical measuring of the works carried out on-site
and the quantity of work costed against the rates in
the bill of quantities.
• This is usually carried out jointly by the main
contractor and the Quantity Surveyor (usually done
monthly.
• The Architect or contract administrator issues an
interim certificate for the amount due to the
contractor and the client has to make payment to the
main contractor within a period stated in the
contract.
• 2. Milestones
• Bidders are asked to breakdown their total price into
a number of sums against pre-determined
milestones.
• Milestones are usually the completion of elements of
the construction works (e.g. completion of the
structure up to a certain level).
• Normally likely to be 20-40 milestones.
• Acknowledgement that a milestone has been
achieved by the contract administrator will lead to
the release of payment of the sum to the contractor.
• This can sometimes be called an activity schedule.
• 3. Stage
• This is similar to milestone payment but likely to be
far fewer stages (e.g. completion of superstructure,
interior finishes).
• 4. Earned Value
• Regular payments made in accordance with an
earned value system.
• Payment will be related to actual progress position
achieved on the work.
• As the value of payments is based on the schedule
assessment of progress it avoids the need to conduct
separately monthly measurements of works carried
out.
• 5. Ex-gratis
• Although not a formally recognized method of
payment,
• in certain extreme cases when lack of cash is
preventing a contractor from carrying out
obligations under the contract,
• a special one-off payment may be made with the
client’s agreement.
• An Ex-gratis payment is made in advance to ensure
certain works are carried out in order to recover or
prevent a delay.
• In most cases where these occur pre-payment
insurance bonds will be accompanied.
• It is important if payment is for materials or
equipment that ownership is clearly established to
guard against insolvency of the contractor.
 Contractor’s Cost
• A contracting organization will incur a great variety
of costs which may be broadly classified as given
below:
• 1. Site operative labour (cost on labour).
• 2. Material cost
• 3. Subcontractors (labour cost)
• 4. Plant & Equipment cost (Hired, owned,
depreciation, obsolescence, wear and tear,
maintenance cost).
• 5. Office Services
• 6. Management of staff……forepersons, site agents.
• Generally, the cost of site operative
labour will be significantly higher in
some areas than in others due to such
factors as construction workload,
• alternative employment and
conditions offered by those alternative
wage expectations.
 Procurement
• Procurement describes the merging of activities
undertaken by the client to obtain a building.
• There are many different methods of construction
procurement;
• however the three most common types of procurement
are traditional (design-bid-build),
• design-build and
• management contracting.
• There is also a growing number of new forms of
procurement that involve relationship contracting where
the emphasis is on a co-operative relationship between
the principal and contractor and other stakeholders
within a construction project.
• New forms include partnering such as
Public-Private Partnering (PPPs) ,
• And private finance initiatives (PFIs).
• The focus on co-operation is to
ameliorate the many problems that
arise from the often highly
competitive and adversarial practices
within the construction industry.
 Traditional Procurement
• Also known as Design-bid-build.
• This is the most common method of construction procurement
and is well established and recognized.
• In this arrangement, the architect or engineer acts as the
project coordinator.
• His or her role is to design the works, prepare the
specifications and produce construction drawings, administer
the contract, tender the works, and manage the works from
inception to completion.
• There are direct contractual links between the architect's client
and the main contractor.
• Any subcontractor has a direct contractual relationship with
the main contractor.
• The procedure continues until the building is ready to occupy.
 Design- Build Procurement
• This approach has become more common in recent
years, and involves the client contracting a single entity
to both provide a design and to build that design.
• In some cases, the design-build package can also
include finding the site, arranging funding and applying
for all necessary statutory consents.
• The owner produces a list of requirements for a project,
giving an overall view of the project's goals.
• Several D&B contractors present different ideas about
how to accomplish their goals.
• The owner selects the ideas he or she likes best and
hires the appropriate contractor.
 Design-Build or Turn-Key
• Often, it is not just one contractor, but a
consortium of several contractors working
together.
• Once these have been hired, they begin
building the first phase of the project.
• As they build phase 1, they design phase 2.
• This is in contrast to a design-bid-build
contract, where the project is completely
designed by the owner, then bid on, then
completed.
 Management procurement systems
• In this arrangement the client plays an active role in
the procurement system by entering into separate
contracts with the designer (architect or engineer),
• the construction manager,
• and individual trade contractors (contractors and
subcontractors).
• The client takes on the contractual role, while the
construction or project manager provides the active
role of managing the separate trade contracts,
• and ensuring that they complete all work smoothly
and effectively together.
• Management procurement systems are
often used to speed up the procurement
processes,
• allow the client greater flexibility in
design variation throughout the contract,
• give the ability to appoint individual work
contractors,
• separate contractual responsibility on
each individual throughout the contract,
• and to provide greater client control.
• Management procurement systems are
appropriate in the following circumstances:
• 1. When the need for early completion of a
project is identified as the main priority;
• 2. When the design is not completely defined
and described before construction;
• 3. When the client has no in-house
management expertise;
• 4. In construction projects which are thought
to be complex, or involved in high technology
or innovative design and construction
• 5. Where aspects of the project involve a
high degree of risk and uncertainty or
varying requirements are expected
throughout the process;
• 6. Where the client and/or consultants
identify the need to consider particular
construction methods during the design
phase, i.e. to consider certain aspects of
constructability (is it buildable?).
 Implications for the Client
• Management procurement systems present a number
of discernible implications for clients:
• 1. The clients need to have in-house skills for
design, construction or procure the services of
consultants.
• These methods provide no clear design input, and
therefore the client must provide his own detailed
brief through in-house preparation or acquire this
through costly means of contracting-out of the
design process.
• 2. Client’s involvement should be
extensive
• Client’s involvement is inherent in the
procurement systems, in particular when
construction management is used, as the
client enters into many contracts directly
with works contractors.
• This approach is heavily dependent upon
client commitment and diligence.
• 3.The Client must Identify Project
Priorities and Needs Very Clearly
• While this is a necessity of any construction
project,
• it is particularly pertinent for management-
based contracts, because cost and quality
constraints are usually less easily controlled
than time and progress.
• The client must be active during briefing
process and identify constructability needs
carefully.
 Quality Control
• The concept of being ‘’in control’’ or having
something ‘’under control’’ is readily understood,
we mean we know what we intend to happen, and
are confident that we can ensure that it does.
• Quality control is primarily concerned with defect
detection.
• The main quality control technique is that of
inspection and statistical quality control techniques
(i.e. sampling) to ensure that the work produced and
the materials used are within the tolerances
specified.
• Some of these limits are left to the inspector’s
judgment and this can be a source of difficulty.
• The major objectives of quality control can be
defined as follows:
• 1. To ensure the completed work meets the
specifications;
• 2. To reduce customers’ or clients’ complaints;
• 3. To improve the reliability of products or work
produced;
• 4. To increase customers’ or clients’ confidence; and
• 5. To reduce production costs.
 Controlling Quality
• The central feature to all quality control
systems is that of inspection.
• To be effective the construction process
requires that work items to be inspected
must be catalogued into a quality
schedule.
• In the case of construction, inspection
takes two forms: that which quantifiable,
e.g. line, levels, verticality and
• and that which is opened to the
inspector’s interpretation, e.g. cleanliness,
fit, tolerances and visual checks.

• There are some précised quantified

inspections including the commissioning
of plant and
• machinery, pressure tests in pipe-work
and strength tests on materials such as
concrete (cube tests of concrete).
 QUALITY CONTROL
IMPLEMENTED IN CONSTRUCTION
• Traditionally, there are two sets of
documents that are used to determine the
required quality of a construction project.
• These are the specifications and the
contract drawings.
• The contractor uses these two documents
during the site operations, stage of any
project to facilitate quality construction.
• The process of actual construction is not
similar to that of a production line in that
there are no fixed physical and time
boundaries to each operation of the
process.
• Hence, the positioning and timing of
quality inspection cannot be pre-
determined.
• In construction, quality checks are
undertaken as each operation and sub-
• The majority of quality checks are
undertaken visually.
• Visual quality checks of each section of
construction are undertaken by the
contractors,
• Engineers and foremen and then by the
resident engineers and inspectors to
ensure compliance with the drawings and
specifications.
 QUALITY ASSURRANCE IN
CONSTRUCTION
• The construction process involves three
parties, the client, the design and the
contractors.
• The following lists the quality actions
required by a contractor in a traditional
contract where design is taken by an
independent designer:
 Contractor’s Quality Actions
• Receive tender documents; Perform
tender review; and prepare quality
assurance submission.
• On award of contract undertake a
contract review.
• Set up site team.
• Prepare project quality plan(PQP) and
submit for approval.
• Place sub-contracts during QA conditions
where appropriate to work package.
Include requirements for documentation,
Submissions, approvals, and records.
• Receive detailed quality plans (DQP)
from sub-contractors for approval prior
start of works.
• Prepare DQP for work if required.
• Place hold points etc. on DQPs to monitor
work packages and approve DQPs.
• Monitor off-site work against DQPs.
• Perform goods inwards inspection to
agreed procedure.
• Undertake plant inspection to agreed
procedure.
• Control work on site against project
quality plan PQP, DQPs, Inspection
checklist, etc.
• Ongoing supplier and sub-
contractor evaluations.
• Generate records as construction
proceeds.
• Make up drawings to as-built state.
• Prepare handover packages and
submit.