3.

PROJECT MANAGEMENT IN THE CONSTRUCTION

INDUSTRY: OVERVIEW AND ADVANCEMENTS
As defined in the PMBOK® Guide, “project management is the application of knowledge, skills,
tools, and techniques to project activities to meet the project requirements.”
 These same components and processes apply in construction, with additional practices to
deliver an end product that is functional and meets stakeholder needs.
 It uses the same Process Groups and is characterized by similar interactions among the
groups and processes.
Project Management Knowledge Areas, Process Groups, and Processes

 The most commonly applied project management methods and processes in the construction
industry use generally recognized good practices that are applicable to most projects most of
the time.
 It is the application of these practices, however, that makes this industry unique.
 The Knowledge Areas in the PMBOK ® Guide are applicable to construction projects, albeit with
modifications to address the unique attributes, practices, and applications across the Process
Groups and Knowledge Areas.
 Project Integration Management in construction is uniquely positioned to address fast-paced, time-
sensitive, and cost- sensitive projects. The project complexity, stakeholder challenges, and
geographically and culturally imposed constraints when combined with project funding,
intricate procurement processes, and the management of risk contribute to the imperative need of
integrating these efforts
 This Knowledge Area is most suited to incorporate a holistic
Project Integration Management
Approach for the construction project management’s core function is integration, that is, avoiding
discrepancies between the various technical and support disciplines
 Project Integration Management begins at the project’s front end, when an owner makes a
business decision to renovate an existing facility or build a new one
 The procurement and engagement of performing organizations begins immediately with the
owner’s need to acquire the special expertise to plan, develop, design, and construct
the project
 The planning and executing activities, along with processes of all Knowledge Areas including
project financing, may utilize different design and construction life cycles, which add
complexity to the delivery of construction projects.
 Contract clauses may describe extensive progress and performance reporting requirements
that enhance the level of detail and accuracy needed for monitoring and controlling during
 project execution
 Changes are often considered inevitable in construction; thus, the focus on integrated change
control is a significant contractual process. Inadequate management of this activity often
leads to contract disputes. Claim, Dispute and Dispute Resolution Mechanisms in
Construction
Claim Introduction

 Claims in construction industry are defined as demands for compensation in terms of

money, time extension or a combination of both a party rightly or wrongly believes
entitled to.

 Claim is mostly concerned with entitlements and liabilities arising under, or as a result of,
a legally valid contract.

 A construction claim is therefore can be a demand for payment of additional

compensation, adjustment of the parties' respective contractual obligations, extension of time
or compensating delay damages, or any other change with regard to the contractual
conditions or terms.
Claim, Dispute and Dispute Resolution Mechanisms in Construction (Cont…)

Causes of Claim
 Causes for claims include among other things the occurrences of deviations from the promises
made under the construction contract during the performance of the Construction Contract.
 Completion time;
 Construction cost;
 Quality performance; and
 Safety requirements.

Procedure for Claim

FIDIC 1999, 2006 MDB edition sets out in clause 20.1 detailed procedures for claims which
include:
 The contractor gives notice to the engineer within 28 days after the
event give rise to the claim has first arisen;
 The contractor submits supporting particulars to the claim as relevant to the
circumstances;
 The contractor send to the Engineer within 42 days a detailed claim with supporting
particulars of the amount claimed (extension of time and/or additional payment); and
 The engineer shall respond within 42 days after receiving the detailed claim with approval,
disapproval or detailed comments.
Dispute can be defined in many ways. Some of them given by different authors are
 presented as follows:

 Brown et al. (1993): a dispute is defined as a class or kind of conflict, which

manifests itself in distinct and justifiable issues. It involves disagreement over issues
capable of resolution by negotiation, mediation or third party adjudication.

 The Oxford dictionary defines Conflict as a dispute or two parties failing to reach a common
understanding.

 It is therefore wise to resolve the conflicts within the industry than involving people who are
not well vest about the industry. Dispute resolution may have the following aspects/
dimensions:
 Preventive,
 Amicable settlement:

 Negotiation,

 Mediation, and

 Conciliation.

 Judgmental:

 Adjudication,

 Arbitration, and

 Litigation

Mediation
 Mediation is an ADR method where a neutral and impartial third party, the mediator,
facilitates dialogue in a structured multi-stage process to help parties reach a conclusive and
mutually satisfactory agreement.
 A mediator assists the parties in identifying and articulating their own interests, priorities, needs
and wishes to each other.
 Mediation is a “peaceful” dispute resolution tool that is complementary to the existing court
system and the practice of arbitration.
Conciliation
 Conciliation is another dispute resolution process that involves building.

 a positive relationship between the parties of dispute, however, it is

 fundamentally different than mediation and arbitration in several respects.

 Conciliation is a method employed in civil law countries, like Italy, and is a more common
 concept there than is mediation.
 While conciliation is typically employed in labour and consumer disputes, Italian judges
encourage conciliation in every type of dispute .
 The “conciliator” is an impartial person that assists the parties by driving their negotiations and
directing them towards a satisfactory agreement.
 It is unlike arbitration in that conciliation is a much less adversarial proceeding; it seeks to
identify a right that has been violated and searches to find the optimal solution.
What is adjudication?
Statutory adjudication was introduced by the Housing Grants, Construction and Regeneration Act
1996 (Construction Act 1996).
 It Applies to parties to a "construction contract", who cannot contract out of
it.
 It is a 28-day procedure (although the parties can agree to extend this
period).
 It is often described as a "pay first, argue later" mechanism for resolving
disputes in the construction industry.
 It is designed to protect cash-flow during construction.
What is adjudication appropriate for?
 Adjudication is appropriate for resolving claims relating to:
 Interim payments.
 Delay and disruption of the works.
 Extensions of time for completion of the works.
 Defects in the works.
 The final account.
 An adjudication can also relate to for complex claims, such as:
 Breach of contract.
 Termination of a contract.
 Professional negligence.
Arbitration
 A non-court alternative method of resolving disputes, where an arbitrator or panel of
arbitrators is appointed by the parties to make a binding decision, from which there are very
limited grounds of challenge.
 Arbitration may be either ad hoc (where the parties determine whatever rules they may
consider appropriate for the arbitration) or administered (where the arbitration is
conducted under the helps of one of several arbitral organisations, such as the
International Chamber of Commerce (ICC), International Centre for Dispute Resolution
(ICDR) or the London Court of International Arbitration (LCIA)).
 4.1.2 Project Scope Management
 Project Scope Management for construction is an interesting but complex topic where the
priorities vary depending upon which stakeholders are managing the project.
 Stakeholder requirements as well as documents such as the contract, drawings, and
specifications should be reviewed thoroughly in scope planning.
 The Monitoring and Controlling Process Group plays a pivotal role due to the potential for extensive
changes on a construction project. These changes can quickly and easily derail a project in ways
such as schedule slippage or cost overruns
 Scope validation is an effective process integrated with scope control.
 Project Schedule Management is critical for a successful project. Since construction is heavily
dependent on time restrictions within contracts, there is an added emphasis on finishing the
project within the allotted time frame.
 Schedule management plays a large role since a typical construction project often involves a
large number of individual contracts (sellers) that are sequenced and coordinated over the project
life cycle.
 Since most construction projects emphasize finishing the project on time, and may instill monetary
damages for late completion, Project Schedule Management has evolved into a very technical
scheduling process.
 Careful detail is developed into the project schedule to identify delays, coupled with an accurate
assessment of the source of the delay, so the responsibility can be assigned.
 Project Schedule Management includes the processes required to manage the timely completion
of the project.
 Planning is of key significance due to the inherent uncertainties involved in a
construction project.
 In the Planning Process Group, activities are defined, activity sequencing is established, activity
duration and resources are estimated, and activity weights are defined.
 The level of detail becomes important due to the multitude of stakeholders involved in a
project.
 Many projects run the risk of not finishing on time due to ineffective schedule development and
control.

 The Monitoring and Controlling Process Group plays an important role in establishing mechanisms
to signal deviations from the baseline and the need for preventive or corrective actions to get
back on schedule.
 Integrated schedules pose unique challenges, but are critical for a
successful project.
 Records, such as site diaries, are an important tool in schedule control.
 The Critical Path Method
The most widely used scheduling technique is the critical path method (CPM) for scheduling. This
method calculates the minimum completion time for a project along with the possible start and
finish times for the project activities. Many texts and managers regard critical path scheduling
as the only usable and practical scheduling procedure.
Computer programs and algorithms for critical path scheduling are widely available and can
efficiently handle projects with thousands of activities.
 The critical path itself represents the set or sequence of activities which will take the longest time
to complete. The duration of the critical path is the sum of the activities' durations along the
path. Thus, the critical path can be defined as the longest possible path through the "network" of
project activities.
 The duration of the critical path represents the minimum time required to complete a project.
Any delays along the critical path would imply that additional time would be required to
complete the project.
 There may be more than one critical path among all the project activities, so completion of the
entire project could be delayed by delaying activities along any one of the critical paths. The CPM
is a systematic scheduling method for a project network and involves four main steps:

 A forward path to determine activities early-start times;

 A backward path to determine activities late-finish times;

 Float calculations; and

 Identifying critical activities.

 Project Cost Management is of vital importance to a construction project’s success as it

impacts the organization’s profitability.
 Estimating and budgeting occur within the Planning Process Group. Estimates are very important,
because decisions to proceed with a project are based on cost estimates.
 Risk analysis should be performed to develop project contingency. Most diagnosed risks in
construction have a financial or cost impact.
 The Monitoring and Controlling Process Group plays a pivotal role in improving cost
predictability and containing costs. The construction industry is fragmented and many complex
and ambitious megaprojects run the risk of project cost overruns due to ineffective cost
control
 Effective cost control techniques may differ on projects, depending on the project contracting
strategy. A critical success factor (CSF) in cost control is having an integrated change
management plan. Actual costs provide a snapshot of the current expenditure of a project,
while forecasting provides an indication of whether the project is on budget or no
Project Cost Management/ Control
 Project Cost Management includes the processes involved in

 planning,
 estimating,

 budgeting and,

 Controlling costs so that the project can be completed within the approved budget.
 To achieve this objective it is essential to develop a construction cost system that enables
to monitor the construction cost in a regular base
 The three purposes of construction cost system/management are;

 providing a means for comparing actual with budgeted expenses and thus draw attention

 It helps to develop a database of productivity and cost performance data for use in
estimating the costs of subsequent projects and

 to generate data for valuing variations and changes to the contract and
potential claims for additional payments
  In this section, we focus on the first of these purposes, the monitoring and control of costs
during the construction operations phase,
Two related outcomes are expected from the periodic monitoring of costs:

 Identification of any work items whose actual costs are exceeding their budgeted
costs, with subsequent actions to try to bring those costs into conformance with the
budget and

 Estimating the total cost of the project at completion, based on the cost record so far
and expectations of the cost to complete unfinished items.
 In the subsequent discussion we will see how can we develop a proper cash flow to
achieve this objective;

 Using;

 Projection of Income and expenses during the life of the project

 To facilitate this several time scheduling are used by contractor

Earned Value Analysis

 The earned value technique uses the cost and schedule baseline to assess project progress
and the magnitude of any variations that occur. The earned value technique involves
developing these key values for each schedule activity, work package, or control
account:
 Planned value (PV) is the budgeted cost for the work scheduled to be completed on an activity
up to a given point in time.
 Earned value (EV) is the budgeted amount for the work actually completed on the schedule activity or
WBS component during a given time period.

 Actual cost (AC) is the total cost incurred in accomplishing work on the schedule activity or
WBS component during a given time period. This AC must correspond in definition and
coverage to whatever was budgeted for the PV and the EV (e.g., direct hours only, direct
costs only, or all costs including indirect cost)
 Project Quality Management seeks to satisfy the owner’s needs as
outlined in the contract requirements and specifications
 For construction projects, Project Quality Management manages both the process and
the product.
 The Planning Process Group reviews construction-specific documents that outline quality
standards that are required to be met for the project to be successful, including contracts,
construction documents, and specifications.
  The Executing Process Group discusses quality compliance audits and quality technical audits
that may require licensed or certified professionals to achieve project requirements and objectives.
 The Monitoring and Controlling Process Group for construction projects may include
conformance reports to validate quality or require rework. Rework can have a significant
impact on a project’s cost and schedule
Project Quality Management/Control

 Project Quality Management processes include all the activities of the performing
organization that determine quality policies, objectives, and responsibilities so that the
project will satisfy the needs for which it was undertaken and it involves the following
activities;
 Quality Planning

 Quality Assurance

 Quality Control with continuous process improvement activities conducted

 throughout

A) Quality Planning

in our cause the quality standard requirements to be Implemented in most of the construction
projects (Building) is Building and Transport Construction Design Authority (BaTCODA)
which describes;

 Materials

 Workmanship and

 Method of Construction

 For some item of works the quality to be fulfilled is also escribed in the BoQ and other supp

B) Quality Assurance
Quality assurance (QA) is the application of planned, systematic quality activities

Quality assurance provision in Ba TCODA

 BaTCODA Under its General Requirments Section Describedthe following issues
as Quality Assurance Mechanisms; Submitals Substitution (Approvals/substitutionof materials
and workmanship)
 Testing and samples (Testing procedures, sampling and the way the cost of testing is adminstered)
 Workmanship (States the adequacy of workmanship both interms of quality and
quantity)
 These two values, the CV and SV, can be converted to efficiency indicators to reflect the cost
and schedule performance of any project.
 CPI is the most commonly used cost-efficiency indicator. And it equals the ratio of the EV to
the AC.
Formula: CPI = EV/AC

 SPI is used, in addition to the schedule status, to predict the completion date and is sometimes
used in conjunction with the CPI to forecast the project completion estimates and it is the
ratio of the EV to the PV.
 Some of the practical quality assurance activities include;
1. Testing Construction Materials as per the requirements of the contract such as;

 Sand
 Aggregate
 Reinforcement bar
 Concrete and Hybrid Composite Beam (HCB) etc

2. Materials Approval as per the requirements of the contract such as;

 Sanitary
 Electrical Materials
 Door and windows Water proofing materials etc

C. Quality Control: Performing quality control (QC) involves monitoring specific project
results to determine whether they comply with relevant quality standards and identifying
way to eliminate course of unsatisfactory results

Project Resources Management

 Construction projects utilize a variety of resources, such as human

resources, machinery and tools, equipment and bulk materials, and others

 Factors such as project site location, type, and size should be taken into
account when mobilizing, utilizing, and demobilizing resources.

 Project Resources Management includes aspects such as acquiring,

handling, storing, and monitoring validity terms for particular goods, as well
as staffing, team building, and honing interpersonal skills.
 The human resources who manage and execute project activities
manipulate other resources in order to build the product of the project
 The volume of resources required and the time required for their
manipulation are key factors for achieving time and cost objectives
 Thus, productivity rates and resource consumption rates are planned and
actively monitored and controlled.

Resource Management

 As we Know from network schedule, the basic inputs to critical- path

analysis are the individual project activities, their durations, and
dependency relationships.
 The CPM algorithm, therefore, is duration-driven. Activities’ durations
here are function of the resources that are required (rather than
available) to complete each activity.
 In order to deal with such issue, a proper management of available
resources is required to adjust the schedule accordingly.

1. Resources definition

• The first step in resource management is to decide exactly what resources

are considered important enough to be managed.
• The most important resources that project managers have to plan and
manage on day-to-day basis are people, machines, materials, and money.
• Obviously, if these resources are available in abundance then the project could
be accelerated to achieve shorter project duration.
• On the other hand, if these resources are severely limited, then the result most likely
will be a delay in the project completion time.
• In general, from a scheduling perspective, projects can be classified as either time
constrained or resource constrained

2. Resources allocation

 Resource Allocation also called resource loading, is concerened with

Aassigning the required number of resources identified for each activity
in the plan. More than one type of resource may be assigned to a specific
activity.

 For example, fixing steel plates on a certain foundation may require

different types of resources such as: welders, laborers and a certain type
 of welding machine.

 From a practical view, resource allocation does not have to follow a constant
pattern; some activities may initially require fewer resources but may require
more of the same resources during the later stages of the project.

3. Resources aggregation
After each activity has been assigned its resources, the next step is to aggregate
the resources used by all activities.
 Resource aggregation is simply the summation, on a period-by-period basis, of the
resources required to complete all activities based on the resource allocation carried
out previously.

 An example is shown in the following figure, where, for a particular

resource, the required resource units for each time period are written on the
bar chart.

 The total number of resource units for each time period can then be summed and a
resource aggregation or load chart can be produced as presented underneath the
bar chart.

4. Resources leveling
 A project is classified as time constrained in situations where the project completion time cann ot
be delayed even if additional resources are required.
 However, the additional resource usage should be no more than what is
absolutely necessary.
 Accordingly, the primary focus, for purposes of scheduling, in time constrained projects
is to improve resource utilization. This process is called resource leveling or smoothing.
 It applies when it is desired to reduce the hiring and firing of resources and to smooth the
fluctuation in the daily demand of a resource, as shown in the following figure.

 Resource something is the process that attempts to determine a resource requirement that is
"smooth" and where peaks and valleys are eliminated.

 Given that the resource requirements of those activities on the critical path are fixed, some order or
priority needs to be established for selecting which activity and which particular resource associated
with this activity should be given priority in the smoothing process.

 Resource leveling shift non-critical activities within their float times so as to move resources from
the peak periods (high usage) to the valley periods (low usage), without delaying the project
Project Communications Management

 The efficiency and effectiveness of the construction process strongly depend on the opportunity
for, and quality of, communications.

 Forming part of the Planning Process Group activities, planning project communications is
important to the success of the project

 Communication planning should be performed in the earliest project phases in design and
construction projects
 This section complements the PMBOK ® Guide with additional considerations on the
contract documents and project documentation assessment

 When performing Project Communications Management, the Executing Process Group and
Monitoring and Controlling Process Group activities help to ensure the effective and
efficient generation and distribution of information.

Project Risk Management

 Project Risk Management in construction deals with the possibility of positive and
negative events arising between others from the design and construction process, the
interests of various project stakeholders, and project context
 When performing risk management in construction, conditions may involve unique situations
regarding stakeholders, international law, or international financial institutions (e.g., projects
developed under collaborative construction project arrangements, public-private partnerships, or
international construction projects)
Project Risk Management
 Risk response planning in construction projects is a more complex
process because of the involvement of subcontractors.
 One major industry-specific characteristic of construction projects is the
intensive use of insurance products as a principal risk transfer instrument
to handle some of the liabilities
 All organizations, individuals, or parties directly or indirectly involved with
the project should evaluate and decide upon appropriate insurance policies
for their circumstances.
 Risk monitoring and control as part of the Monitoring and Controlling Process
Group should be developed proactively and continually during the project
life
Insurance in construction

 This section will discuss some of the most common insurance policies
available for construction projects and the insurance coverage provided by
those policies.

 Although all of the types of policies discussed below are not necessary for
all entities involved with a construction project, these are the types of
coverages that should be considered and held up against the policyholder’s
risk exposures to decide if the coverages are necessary and economically
feasible
1. Builder Risk Insurance

 Builder Risk Insurance is need during Construction to cover the value of the
building itself, should the building being constructed be damaged.

 This type of policy, in general covers the building or structure

being built, building materials and supplies intended to become a
permanent part of the building, and temporary structures such as
scaffolding and forms.

 Builder Risk coverage is intended to cover buildings during the course

of construction only. Once they are completed, another policy such as
the homeowners policy is needed

2. Commercial General Liability Insurance

 Commercial General Liability (CGL) Insurance, Excess/Umbrella Liability

Insurance. In addition to insuring the building, any party involved with a
construction project must be sure to have third party liability coverage in place.

 This coverage is generally supplied by coverage under a Commercial General

Liability insurance policy (CGL). Coverage under CGL policies is generally limited
to claims against the insured for “bodily injury” or “property damage” resulting
from an “occurrence.”

3. Workers Compensation
 Any party involved with a building under construction is generally required to carry
workers’ compensation insurance.
 Workers’ compensation insurance covers injuries and occupational diseases
picked up at work.
 Insurance under this policy will cover their medical bills, a portion of lost wages,
vocational rehabilitation, and death benefits.
 The coverage amount is established by state law and benefits don't vary from
company to company within the same state.

4. Pollution

 Many contractors assume that unless they are engaging in environmental

remediation work, they have no pollution liability exposures.
 However, many courts have ruled otherwise, finding contractors liable for a
wide range of pollution liabilities.
  Virtually every standard CGL policy contains a pollution liability exclusion,
which is almost an absolute pollution exclusion.
 Therefore, it is imperative that a contractor understand the scope of pollution
liability coverage under its CGL policy, the availability of limited pollution
liability endorsements, and the existence of broad form pollution liability
policies if needed.

5. Professional Liability

 Project owners are faced with an array of hazards related to the professional
services they seek from design and construction professionals (DCPs).
 DCPs, such as architects, engineers, agency construction managers, project managers
and owners’ representatives, are, of course, an integral part of the construction
industry, but they may be involved in losses of many kinds, from cost overruns,
delayed completion, bodily injury and sick-building syndrome to environmental
pollution.
 While most design firms carry Professional Liability Insurance (PLI) from a project
owner’s viewpoint, traditional PLI policies may have significant limitations

These limitations include:

1. Low Policy Limits — Most DCPs carry professional liability limits of $1 million
or less;
2. Shared Limits — Most professional liability policy limits cover all projects
undertaken by the firm and are subject to erosion by other claims and defense
costs.
3. Claims-Made Coverage — Professional liability policies must be renewed annually
to maintain coverage.
4. Limited Coverage Terms — Underwriters may restrict coverage for certain
exposures/some specific exposures
6. Controlled Insurance Plan (CIP) or “Wrap-Up”
 In recent years, “wrap-up” insurance programs have been used to help decrease the cost of
construction while making the project safer. With a wrap-up program, the owner furnishes a
single insurance program for all parties involved in the project for the duration of the project
term.

 Most wrap-ups include workers compensation, general and excess liability, and builders risk coverages
(auto liability and contractors equipment are not included).

 Wrap-ups can include project architects/engineers errors and omissions coverage and other optional
coverages.

 Wrap-ups on large construction projects can be either Owner Controlled (OCIP) or Contractor
Controlled (CCIP).

 Either wrapup entitles the owner to reduce risks and provide a comprehensive insurance program for all
participants in the project.
.

7. Other Project Coverage’s

 Depending on the type of construction project and the responsibilities of the various parties
involved, parties may face additional potential liability exposures
1. Equipment breakdown insurance (Boiler), traditionally called boiler and machinery insurance,
covers loss resulting from the accidental breakdown of almost any type of equipment that
operates under pressure or that controls, transmits, transforms, or uses mechanical or
electrical power.
2. Contractors Equipment Coverage, Contractors equipment policies are specialized policies that
are designed to address the mobile nature of contractors’ equipment and the unique hazards to
which the equipment is exposed.
3. Commercial Crime Coverage, Commercial crime policies are designed to insure against certain
types of losses that are not covered by a standard commercial property policy, such as
employee dishonesty/theft and forgery.
 Project Procurement Management

 Construction projects are almost entirely based on the procurement of contractual arrangements
between the multitude of sellers and buyers, and include the procurement of capital and project
equipment and materials.

 The construction of a new home may only have one or two contracts in place; however, on large
projects there may be thousands of contracts. Either way, Project Procurement Management
focuses on planning and executing well-defined contract agreements for specific scopes of work
throughout the
project life cycle

 Planning and executing for the procurement effort in many situations will overlap with project
initiating processes in order to assist the owner with the preliminary scope definition and
development activities.

 The results from this effort lead to all other procurement for engineering, design services, and
construction work, for the purpose of moving contractors, suppliers, and consultants toward
achieving the owner’s objectives.

Project Stakeholder Management

 The unique characteristics of construction projects influence the number, type, and roles of project
stakeholders

 The Planning Process Group discusses the relationships among the stakeholders in a construction
project that are developed with regard to contractual provisions or other formal documents.

 Division of responsibilities is considered, and impacts on communications are included in the

project communication plan.

 The Executing Process Group emphasizes the relationships between project stakeholders and the
importance of the interpersonal skills of project team members when managing stakeholder
engagement

 The Monitoring and Controlling Process Group addresses the temporary nature of some stakeholders’
representatives and the resulting need to monitor the process for their replacement.
 Project Health, Safety, Security, and Environmental Management (HSSE)

 This section emphasizes health, safety, security, and environmental management for
construction projects.

 Site security and controlled access are discussed for construction job sites.
 Employee health and wellness are introduced for construction personnel as these directly
affect construction project risk and safety.

 While HSSE is applicable to all industries, the unique hazards in construction projects
intensify the need for additional measures.

 The Planning Process Group includes a proactive view of health,safety, and environmental policy
compliance.

 In addition to employee health and site security, a comprehensive health, safety, and environmental
management plan is developed to address specialized stakeholders, reporting requirements,
documentation and record storage requirements, training, and additional government
requirements.

 The Executing Process Group involves the systematic application of the health, safety, security, and
environmental plans, while the Monitoring and Controlling Process Group focuses on employing a
method of audits, analyses, and measurements to determine the effectiveness of the established
plans for meeting regulatory and project requirements.
 The requirements of the Health, Safety, Security, and Environmental (HSSE) planning processes and
activities are:
Owner/sponsor-enforced regulations,
Mandated standards and regulations (local, state, national, or international),
Both owner/sponsor and internationally accepted standards and regulations, and
Contractor good practices and working criteria.
 HSSE management applies to all aspects of project management.
 As in the case of quality management, this broad application results in addressing three distinctive (and
sometimes conflicting) sets of requirements, namely:
 Project health, safety, and environmental management applies to all aspects of project management.
 As in the case of quality management, this broad application results in addressing three distinctive (and
sometimes conflicting) sets of requirements, namely:
Mandatory statutory requirements.
Customer requirements
Requirements of the performing organization

Project HSSE Management Planning

  HSSE planning are overlapping and integral efforts.
 The HSSE planning process is aimed at providing a safe, secure, healthy work environment
to prevent harm to people or damage to the environment.
 The HSSE policy should demonstrate commitment from senior-level management to these goals and
incubate a culture that implements HSSE policies through all levels of the organization.

Components of the HSSE management planning

 Contract Requirements
 Safety and Environmental Policy
 Safety Metrics
 Lost time injury frequency rate (LTIFR)
 Total recordable injury frequency (TRIF)
 Serious incident frequency (SIF)
 Site Neighborhood Safety and Environmental Characteristics and
Constraints
 Trials and Simulations
 Cost of Safety (COS) and Cost of Environment (COE)

Examples of COS and COE that could cause significant cost and schedule impacts include:

 Hazardous waste clean-up from a spill or contaminated soil,

 Environmental clean-up of contaminated water sources or ecological areas,

 Deforestation and forestation,

 Public infrastructure disturbances,

 Community perception requiring public outreach to restore, and

 Serious injury or fatality.

 Process Mapping

 Flowcharting

 Project Safety and Environmental Requirements Review

 Project requirements review includes an assessment and determination of:

Characteristics and criteria of activities and products

Verification criteria
Alternatives review and selection
 HSSE Management Plan, which includes:
Staffing or human resources plan, budget,
Records and documentation requirements,
 Stakeholder requirements, reporting requirement, Project execution constraints, Agreed-upon
performance and acceptance criteria, Project administrative and contract closure procedures,
operational definitions, Communication.
 Safety and Environmental Zoning and Signage
 Safety and Environmental Training and Induction Requirements
 The requirements for safety and environmental training are generally divided into one of the
following:
 Safety and environmental training
 Safety and environmental inductions
 Tool-box meetings
 Traffic Management Plan
 Emergency Response Plan
 Permit to Work Management Plan
 Waste Management Plan
 Safety and Environmental Programs

Project HSSE Management Executing

 Implementation and assurance of the various HSSE plans occurs during the executing phase of the
project by specialized resources as the responsible entity.
 Applying the planned, systematic HSSE activities to ensure that the project employs all processes needed
to meet the requirements and determining whether these processes and their integration are
effective is part of this responsibility.
 Evaluating the results of the HSSE management on a regular basis provides confidence that the
project will safely and environmentally satisfy the relevant HSSE standards.
 Without this assurance, projects not in compliance can incur devastating financial and life-threatening
consequences.
 Components of Project HSSE Management Executing activities:
Project HSSE Assurance
 Safety and Environmental Audits
 Safety and Environmental Hazard Risk Analyses
 Safety and Environmental Assurance Measurements
Project HSSE Management Monitoring and Controlling
 The HSSE monitoring and control describes how the project management team will implement the necessary
controlling activities of the performing organization.
 The monitoring and control may contain or make reference to specific procedures to be employed to
ensure the compliance of the work that is carried out, including:
Determining and applying measures for monitoring the achievement of specific project results
throughout the project to determine whether they comply with the safety and environmental
requirements, and
 Identifying unsatisfactory performance and identifying ways to eliminate causes of unsatisfactory
safety and environmental performance. This includes failures on the part of planning and
assurance.
 Project HSSE Management Monitoring and Controlling activities:
 Key Performance Indicators
The HSSE management plan includes generally accepted key performance indicators (KPI) for
monitoring and controlling, including:
Lost time injury (LTI),
Total recordable injury (TRI),
Worked hours,
Near misses (NMs),
Unsafe acts and condition (UA/UC), and
Serious incidents frequency (SIF).
 Heinrich’s Accident Triangle
 Accident Investigation
 Defect Repair Review
roject Financial Management
 Project Financial Management covers important aspects and considerations with an explanation of
industry- specific documents, tools, and techniques to better understand and navigate the
financial decisions of construction projects.
 Project managers in construction should have a basic knowledge of project financial and
accounting systems; be able to record and summarize project financial transactions; analyze,
verify, and report the results; and provide financial cash forecasts as needed.
Project Financial Management

 In the Planning Process Group, financial planning as a construction-specific activity covers the
alternatives that may be used for the financial planning of a construction project

 Financial control in the Monitoring and Controlling Process Group is executed in the most
effective way to ensure all items are within budget and aligned with the financial cash
forecast.

 Effective financial monitoring and control is achieved when project progress reports are
distributed regularly. Financial reports, financial internal and external audits, and project
accounting systems are important topics discussed in this section.
Project Financial Management Planning

 Activities include:

 Sources of Funds for Construction Projects

Critical input is reviewed to:

 Verify definition and clarify scope, schedule, and budget;

 Assess project objectives and benefits;

 Justify the return on investment;

 Establish correlation to business strategic plans;

 Validate the ability to perform effective project management; and

 Determine realistic milestones to meet schedule dates and asset goals.

 Finance techniques may differ by country or region, type of project, owner, and total funding
sought.

 Nevertheless, the following are some of the most commonly used finance techniques in privately
funded construction projects in the global construction industry:
 Traditional (senior debt, construction loan)
 Subordinated debt
 Mezzanine financing
 Asset backed securitization (ABS) financing
 Project finance bonds
 Miscellaneous financing methods
 Project leasing.
 Contractual (vendors/contractors finance).
 Preconstruction sales in real estate construction projects.
 Factoring.
 Other possible source of funds.

 Short-Term Financial Fluctuations

 The construction progress of work may experience shortfalls in financial resources or cash
flow both from the owner’s and contractor’s perspectives.

 In some cases, the following informal methods are used to confront these short-term financial
fluctuations in the construction industry:
  Overdraft facilities
 Lines of credit
 Payment delays
 Cost in excess of billings (under billing) and billings in excess of costs (overbilling)
 Owner resources

 Economic Environment

 Analytical Techniques, Feasibility Study, and Sensitivity Analysis

 Construction Project Finance and Corporate Finance

 Legal Entity

 Contract Requirements

 Financial Impact Risk Factors

 Tax Planning as a Financial Factor

Project Financial Management Monitoring and Control

 Financial control ensures that bonds are reduced when necessary, calls for funds from project partners
are made as needed, and all insurance and bank withdrawals/deposits are performed at the
appropriate times.

 Financial control and cost control should be executed effectively to ensure all items are within budget
and the financial cash forecast.

 Effective project financial monitoring and control is better achieved when a project produces regular
progress reports

 Activities include:

 Project Accounting System

 Financial Internal and External Audits
 Cash Flow Analysis
 Financial reports
 Professional Expertise: Project Monitor, Lender’s Engineer, Investor’s Engineer, or Technical Advisor
 Ex-Post Evaluations
Advances and Societal Influences in Construction Project Management

 The construction industry is evolving due to advances in technology, management techniques, and
project delivery methods. The following advances in the construction industry are not necessarily
new, but their use is becoming more prevalent.

Technology: The following are a few examples of new technology:

Machines equipped with geospatial positioning, sensing, and measurement equipment

 that offer real-time data
Mobile technology and mobile apps facilitate project team connectivity by providing two-way
access to real-time project information.
3-D printing technologies that create faster and more accurate three-dimensional components for use in
the construction process.

Building information modeling (BIM)

 Building information modeling (BIM) is an information-based system of processes involving the generation
and management of digital representations of physical and functional characteristics of
construction projects creating long-term value and enhancing the possibility of innovation.
 It improves how projects are designed and built, and benefits many
areas of construction.
 BIM makes possible the distribution of information to all stakeholders for the duration of the project
life cycle.
It provides the means to construct complete virtual prototypes before actual construction takes
place.
Modern Methods of Construction

Prefabrication and modularization are not new activities to construction professionals; however, they
are becoming more prevalent as key drivers to improve construction industry productivity through
greater efficiencies.
Modern technology is used by owners to reduce costs and compress schedules by transferring expensive
onsite labor to offsite facilities and building in-house under a controlled environment.
Quality and safety are also a big consideration in transferring onsite activities to offsite locations.