ARCH411 – SPECIALIZATION 1

CONSTRUCTION
MANAGEMENT
1 - CONSTRUCTION PRACTICES
Project Stages
A. Planning and Definition

Project definition involves establishing braod

project characteristics, such as location,
performance criteria, size, configuration, layout,
equipment, service, and other owner requirements
needed to establish the general aspects of the
project.
Project Stages
B. Design

The Design phase involves the architectural

and engineering design of the entire project. It
culminates in the preparation of final working
drawings and specifications for the total
construction program.
Project Stages
C. Procurement and Construction

Procurement refers to the ordering, expediting,

and delivering of key project equipment and
materials.

Construction, the process of physically

erecting the project and putting the materials and
equipment into place.
Owner
The instigating party that gets the project
financed, designed, and built.

• Public owners are public bodies of some kind, and range from the federal
government down through state, county, and municipal entities to a
multiplicity of local boards, commissions, and authorities.
• Private owners may be individuals, partnerships, corporations, or various
combinations thereof. Most private owners have the structure built for their
own use: business, habitation, or otherwise. However, some private owners do
not intend to be the end users of the constructed facility; rather, they plan to
sell, lease, or rent the completed structure to others.
Architect-Engineer

The architect-engineer, also known as the design

professional, is the party or firm that designs the project.

The term ‘‘architect-engineer’’ is used in this book to refer to the

design professional, regardless of the applicable specialty or the
relationship between the architect-engineer and the owner.
Architect-Engineer

• Work inspection
• Change order
• Review payment
• Materials and samples
• 3d image
Prime Contractor

also known as a general contractor, is the firm that is in

prime contract with the owner for the construction of a project,
either in its entirety or for some designated portion thereof. In
this regard, the owner may choose to use a single prime
contract or several separate prime contracts.
Competitive Bidding

The owner selects a prime contractor on the basis of

competitive bidding, negotiation, or some combination of the
two.

The competitive bidding of public projects is often required

by law and is standard procedure for public agencies.
Essentially all public construction work is done by this method.
Competitive Bidding

SELECTION METHODS

• LOW-BID SELECTION
• BEST-VALUE SELECTION
• QUALIFICATION-BASED SELECTION
Negotiated Contracts

A contract is negotiated between the owner and the chosen

contractor. Clearly, such contracts can include any terms and
provisions that are mutually agreeable to the parties. Most
negotiated contracts are of the cost-plus-fee type, a subject
that will be developed more fully later.
Negotiated Contracts

PAYMENT CONTRACTS

• LUMP-SUM OR FIXD FEE

• COST-PLUS FEE
• GUARANTEED MAXIMUM PRICE
• UNIT-PRICE
Combined Bidding
and Negotiation

An owner sometimes will combine elements of both

competitive bidding and negotiation. One such process is to
have a bid where the competing contractors are required to
submit their qualifications along with their bids and are
encouraged to tender suggestions as to how the cost of the
project could be reduced.
Subcontacting

A general contractor will subcontract work depends greatly on

the nature of the project and the contractor’s own organization.
There are instances where the job is entirely subcontracted, so
the general contractor provides only supervision, job
coordination, project billing, and perhaps general site services.
Design-Bid-Construct
Traditionally, field construction is not begun until the
architect-engineer has completed and finalized the design. This
sequence is still predominant in the industry and is referred to as
the design-bid-construct procedure.
A number of financial considerations dictate the earliest
possible completion date for many construction projects. It is
possible to reduce the total design-construction time required
for some projects by starting the construction before complete
design of the entire project has been accomplished.
Fast Tracking

Refers to the overlapping accomplishment of project design

and construction. As the design of progressive phases of the
work is finalized, these work packages are put under contract, a
process also commonly referred to as phased construction.
Construction Contract
Services

A myriad of contract forms and types are available to the

owner for accomplishing its construction needs, and all of them
call for defined services to be provided under contract to the
owner. The scope and nature of such services can be made to
include almost anything the owner wishes.
Construction Services

A large proportion of construction contracts provide that the

general contractor have responsibility to the owner only for
accomplishment of the field construction. Under such an
arrangement, the contractor is completely removed from the
design process and has no input into it.
Design-Construct

When the owner contracts with a single firm for both design and
construction and possibly procurement services, this is referred
to as a design-construct project. This form of contract is usually
negotiated, although occasionally it is competitively bid. Similar
to “turnkey” contract.
Fixed-Sum Contract

A fixed-sum contract requires the contractor to complete a

defined package of work in exchange for a sum of money fixed
by the contract. Should the actual cost of the work exceed this
figure, the contractor absorbs the loss. The owner is obligated to
make only such total payment as is stipulated in the contractual
agreement. A fixed-sum contract may be either lump sum or
unit price.
Cost-Plus-Fee Contracts

This contract provides payment for the contractor including

the total cost of the project as well as a fixed fee or percentage
of the total cost. This contract is beneficial to the contractor
since any additional costs will be for paid even though they were
unexpected for the owner.
Work-by-Force Account
The owner may elect to act as its own constructor rather
than have the work done by a professional contractor. If the
structure is being built for the owner’s own use, this method of
construction is called the force-account system.

In such a situation, the owner may accomplish the work with

its own forces and provide the supervision, materials, and
equipment itself. Or the owner may choose to subcontract the
entire project, assuming the responsibility of coordinating and
supervising the work of the subcontractors.
Turnkey and BOT Contracts
Turnkey and build-operate-transfer (BOT) contracts provide
a vehicle for complete project delivery by the contractor.

Turnkey arrangement, the owner provides the facility design

requirements to the contractor, which designs and constructs
the facility under a single contract. The single contract
eliminates the need for owner coordination and reduces project
duration. Upon completion, the key to the project is turned over
to the owner and the contract is closed out.
Turnkey and BOT Contracts

BOT contracts are an extension of the turnkey method. The

contractor designs, constructs, operates, and maintains the
facility for a predetermined concessionary period.

This contracting method generally is used for bridges, highways,

power plants, and similar projects that generate a long-term
revenue stream. At the end of the concession period, ownership
transfers from the contractor to the owner.
Speculative Construction

When owners build structures for sale or lease to other parties, they engage
in what is commonly referred to as speculative construction. Housing and
commercial properties like shopping centers and warehousing facilities are
common examples of such construction. In tract housing, for instance,
‘‘merchant’’ builders develop land and build housing for sale to the general
public. This is a form of speculative construction through which developers act
as their own prime contractors. They build dwelling units on their own account
and employ sales forces to market their products.
Management during the
Design Phase
Project cost and time control actually begin during the
design phase. In the initial design stages, estimates such as
annual cost to the owner and total life-cycle costs of the facility
are made.
Time control during the design stage is directed toward
minimizing construction time consistent with project quality and
total cost.
Management of Field
Construction

The management of field construction customarily is done on

an individual project basis, with a project manager being made
responsible for all aspects of the construction. For large projects,
a field office usually is established directly on the job site for the
use of the project manager and his staff.
Project Manager

The project manager organizes, plans, schedules, and

controls the fieldwork and is responsible for getting the project
completed within the timeand cost limitations. He acts as the
focal point for all facets of the projectand brings together the
efforts of all organizations having input into theconstruction
process. He coordinates matters relevant to the project and
expedites project operations by dealing directly with the
individuals and organizations involved.
Project Manager Qualification

REQUIRED KNOWLEDGE SKILLS and ABILITIES

• Construction and Building • Time Management

• Technology • Negotiation
• Public safety • Decision Making
• Customer Service • Problem Solving
• Human Resource
• Mathematics
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