Construction management

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Construction management (CM) aims to control the quality of a project's scope, time, and cost (sometimes referred to as a project management triangle or "triple constraints") to maximize the project owner's satisfaction. [1] [2] It uses project management techniques and software to oversee the planning, design, construction and closeout of a construction project safely, on time, on budget and within specifications.

Contents

Practitioners of construction management are called construction managers. They have knowledge and experience in the field of business management and building science. [3] Professional construction managers may be hired for large-scaled, high budget undertakings (commercial real estate, transportation infrastructure, industrial facilities, and military infrastructure), called capital projects. Construction managers use their knowledge of project delivery methods to deliver the project optimally.

The role of the contractor

Contractors are assigned to a construction project during the design or once the design has been completed by a licensed architect or a licensed civil engineer. This is done by going through a bidding process with different contractors. As dictated by the project delivery method, the contractor is selected by using one of three common selection methods: low-bid selection, best-value selection, or qualifications-based selection.

A construction manager is hired for the following deliverables means and methods, communications with the authority having jurisdiction, time management, document control, cost controls and management, quality controls, decision making, mathematics, shop drawings, record drawings and human resources. [4]

In the US, the Construction Management Association of America (CMAA) states the most common responsibilities of a Construction Manager fall into the following 7 categories: Project Management Planning, Cost Management, Time Management, Quality Management, Contract Administration, Safety Management, and CM Professional Practice. CM professional practice includes specific activities such as defining the responsibilities and management structure of the project management team, organizing and leading by implementing project controls, defining roles and responsibilities, developing communication protocols, and identifying elements of project design and construction likely to give rise to disputes and claims. [5] [ failed verification ]

Function

The functions of construction management typically include the following:

  1. Specifying project objectives and plans including delineation of scope, budgeting, scheduling, setting performance requirements, and selecting project participants.
  2. Maximizing the resource efficiency through procurement of labor, materials and equipment.
  3. Implementing various operations through proper coordination and control of planning, design, estimating, contracting and construction in the entire process.
  4. Developing effective communications and mechanisms for resolving conflicts. [6]

Obtaining the project

Bids

A bid is given to the owner by construction managers that are willing to complete their construction project. A bid tells the owner how much money they should expect to pay the construction management company in order for them to complete the project. [4]

Selection methods

Payment contracts

Project stages

Characteristics of construction project stages of various project management approaches Buildings-05-00209-g001.png
Characteristics of construction project stages of various project management approaches

The stages of a typical construction project have been defined as feasibility, design, construction and operation, [7] each stage relating to the project life cycle.

Feasibility and design

Feasibility and design involves four steps: programming and feasibility, schematic design, design development, and contract documents. It is the responsibility of the design team to ensure that the design meets all building codes and regulations. It is during the design stage that the bidding process takes place. [4]

Pre-construction

The pre-construction stage begins when the owner gives a notice to proceed to the contractor that they have chosen through the bidding process. A notice to proceed is when the owner gives permission to the contractor to begin their work on the project. The first step is to assign the project team which includes the project manager (PM), contract administrator, superintendent, and field engineer. [4]

During the pre-construction stage, a site investigation must take place. A site investigation takes place to discover if any steps need to be implemented on the job site. This is in order to get the site ready before the actual construction begins. This also includes any unforeseen conditions, such as historical artifacts or environment problems. A soil test must be done to determine if the soil is in good condition to be built upon. [4]

Procurement

The procurement stage is when labor, materials and equipment needed to complete the project are purchased. This can be done by the general contractor if the company does all their own construction work. If the contractor does not do their own work, they obtain it through subcontractors. Subcontractors are contractors who specialize in one particular aspect of the construction work such as concrete, welding, glass, or carpentry. Subcontractors are hired the same way a general contractor would be, which is through the bidding process. Purchase orders are also part of the procurement stage. [4]

Construction

The construction stage begins with a pre-construction meeting brought together by the superintendent (on an American project). The pre-construction meeting is meant to make decisions dealing with work hours, material storage, quality control, and site access. The next step is to move everything onto the construction site and set it all up. [4]

A contractor progress payment schedule is a schedule of when (according to project milestones or specified dates) contractors and suppliers will be paid for the current progress of installed work.

Progress payments or interim payments are partial payments for work completed during a portion of a construction period, usually a month. Progress payments are made to general contractors, subcontractors, and suppliers as construction projects progress. Payments are typically made on a monthly basis but could be modified to meet certain milestones. Progress payments are an important part of contract administration for the contractor. Proper preparation of the information necessary for payment processing can help the contractor financially complete the project. [8]

Owner occupancy

Once the owner moves into the building, a warranty period begins. This is to ensure that all materials, equipment, and quality meet the expectations of the owner that are included within the contract. [4]

Issues resulting from construction

Dust and mud

When construction vehicles are driving around a site or moving earth, a lot of dust is created, especially during the dryer months. This may cause disruption for surrounding businesses or homes. A popular method of dust control is to have a water truck driving through the site spraying water on the dry dirt to minimize the movement of dust within and out of the construction site. When water is introduced, mud is created. This mud sticks to the tires of the construction vehicles and is often lead out to the surrounding roads. A street sweeper may clean the roads to reduce dirty road conditions.

Environmental protections

Construction activity documentation

Project meetings take place at scheduled intervals to discuss the progress on the construction site and any concerns or issues. The discussion and any decisions made at the meeting must be documented. [4]

Diaries, logs, and daily field reports keep track of the daily activities on a job site each day.

Labor statements are required on a daily basis. Also list of Labor, PERT CPM are needed for labor planning to complete a project in time.

Resolving disputes

Study and practice

Construction Management education comes in a variety of formats: formal degree programs (two-year associate degree; four-year baccalaureate degree, master's degree, project management, operations management engineer degree, doctor of philosophy degree, postdoctoral researcher); on-the-job-training; and continuing education and professional development. Information on degree programs is available from ABET, the American Council for Construction Education (ACCE), the American Academy of Project Management (AAPM), the Construction Management Association of America (CMAA) or the Associated Schools of Construction (ASC).

According to the American Council for Construction Education (one of the academic accreditation agencies responsible for accrediting construction management programs in the U.S.), the academic field of construction management encompasses a wide range of topics. These range from general management skills, through management skills specifically related to construction, to technical knowledge of construction methods and practices. There are many schools offering Construction Management programs, including some offering a master's degree. [9] [10]

Software

Capital project management software (CPMS) refers to the systems that are currently available that help capital project owner/operators, program managers, and construction managers, control and manage the vast amount of information that capital construction projects create. A collection, or portfolio of projects only makes this a bigger challenge. These systems go by different names: capital project management software, computer construction software, construction management software, project management information systems. Usually construction management can be referred as subset of CPMS where the scope of CPMS is not limited to construction phases of project.

Required knowledge

Project delivery methods

Design, bid, build contracts

The phrase "design, bid, build" describes the prevailing model of construction management, in which the general contractor is engaged through a tender process after designs have been completed by the architect or engineer.

Design-build contracts

Many owners – particularly government agencies – let out contracts known as design-build contracts. In this type of contract, the construction team (known as the design-builder) is responsible for taking the owner's concept and completing a detailed design before (following the owner's approval of the design) proceeding with construction. Virtual design and construction technology may be used by contractors to maintain a tight construction time.

There are three main advantages to a design-build contract. First, the construction team is motivated to work with the architect to develop a practical design. The team can find creative ways to reduce construction costs without reducing the function of the final product. The second major advantage involves the schedule. Many projects are commissioned within a tight time frame. Under a traditional contract, construction cannot begin until after the design is finished and the project has been awarded to a bidder. In a design-build contract the contractor is established at the outset, and construction activities can proceed concurrently with the design. The third major advantage is that the design-build contractor has an incentive to keep the combined design and construction costs within the owner's budget. If speed is important, design and construction contracts can be awarded separately; bidding takes place on preliminary plans in a not-to-exceed contract instead of a single firm design-build contract.

The major problem [11] with design-build contracts is an inherent conflict of interest. In a standard contract the architect works for the owner and is directly responsible to the owner. In design-build teaming agreement, the architect works for the design-builder, not the owner, therefore the design-builder may make design and construction decisions that benefit the design-builder, but that may not benefit the owner. During construction, the architect normally acts as the owner's representative. This includes reviewing the builder's work and ensuring that the products and methods meet specifications and codes. The architect's role is compromised when the architect works for the design-builder and not for the owner directly. Thus, the owner may get a building that is over-designed to increase profits for the design-builder, or a building built with lesser-quality products to maximize profits. However, incentive clauses are written into the contract to mitigate these issues.

Project Management as PDM

Turnkey Contracts

A project delivery method where the construction company takes full responsibility for a project.

Construction Management as PDM

Skyscrapers under construction in Panama City, Panama Panama Construction.JPG
Skyscrapers under construction in Panama City, Panama

The construction industry typically includes three parties: an owner, a licensed designer (architect or engineer) and a builder (usually known as a general contractor). There are traditionally two contracts between these parties as they work together to plan, design and construct the project. [12] The first contract is the owner-designer contract, which involves planning, design, and construction contract administration. The second contract is the owner-contractor contract, which involves construction. An indirect third-party relationship exists between the designer and the contractor, due to these two contracts.

An owner may also contract with a construction project management company as an adviser, creating a third contract relationship in the project. The construction manager's role is to provide construction advice to the designer, design advice to the constructor on the owner's behalf and other advice as necessary.

The construction project manager is sometimes referred to as an "Owner's Representative." The CM's role is to represent the interests of the Owner throughout the various phases of a project beginning as early as feasibility studies and conceptual planning of the project. Construction Managers help to inform good decision making on behalf of the owner through planning, design, permitting, construction contract procurement, and during construction. A primary role of the CM is to ensure the terms of the Construction Contract are fulfilled by the Contractor. A CM can be an individual or company focused on providing construction management services. A CM typically does not hold the contracts of the project design firms or construction firms but assists or leads the effort on behalf of the Owner to procure those services and ensure successful execution of those contracts' terms.

A CM firm is typically hired as a personal or professional, qualifications-based service rather than as a bid. Costs are based on a guaranteed maximum price or fixed price, and substantiated by level of effort or staffing plan that identifies the hours per service task to be provided, and based on individual billable hourly rates of proposed project-assigned staff.

Agency CM

Construction cost management is a fee-based service in which the construction manager (CM) is responsible exclusively to the owner, acting in the owner's interests at every stage of the project. The construction manager offers impartial advice on matters such as:

  • Optimum use of available funds
  • Control of the scope of the work
  • Project scheduling
  • Optimum use of design and construction firms' skills and talents
  • Avoidance of delays, changes and disputes
  • Enhancing project design and construction quality
  • Optimum flexibility in contracting and procurement
  • Cash-flow management

Comprehensive management of every stage of the project, beginning with the original concept and project definition, yields the greatest benefit to owners. As time progresses beyond the pre-design phase, the CM's ability to effect cost savings diminishes. The agency CM can represent the owner by helping select the design and construction teams and managing the design (preventing scope creep), helping the owner stay within a predetermined budget with value engineering, cost-benefit analysis and best-value comparisons. The software-application field of construction collaboration technology has been developed to apply information technology to construction management.

CM at-risk (CMaR)

CM at-risk is a delivery method which entails a commitment by the construction manager to deliver the project within a Guaranteed Maximum Price (GMP). The construction manager acts as a consultant to the owner in the development and design phases (preconstruction services), and as a general contractor during construction. When a construction manager is bound to a GMP, the fundamental character of the relationship is changed. In addition to acting in the owner's interest, the construction manager must control construction costs to stay within the GMP.

CM at-risk is a global term referring to the business relationship of a construction contractor, owner and architect (or designer). Typically, a CM at-risk arrangement eliminates a "low-bid" construction project. A GMP agreement is a typical part of the CM-and-owner agreement (comparable to a "low-bid" contract), but with adjustments in responsibility for the CM. The advantage of a CM at-risk arrangement is budget management. Before a project's design is completed (six to eighteen months of coordination between designer and owner), the CM is involved with estimating the cost of constructing a project based on the goals of the designer and owner (design concept) and the project's scope. In balancing the costs, schedule, quality and scope of the project, the design may be modified instead of redesigned; if the owner decides to expand the project, adjustments can be made before pricing. To manage the budget before design is complete and construction crews mobilized, the CM conducts site management and purchases major items to efficiently manage time and cost. [13]

Advantages

  • CM is working "at risk", therefore have incentive to act in the owner's interest, as well as to efficiently manage construction costs, considering they would be liable for any amount in excess of the GMP
  • Ability to handle changes in design or scope [14]

Drawbacks

  • If a cost overrun occurred, it could cost the CM a great deal of money
  • The CM is allowed some mistake-related contingency, therefore there is a possibility that they will compensate by reducing the scope of the work to fit the GMP
  • Since the GMP is settled before design begins, it is difficult for owners to know whether they received the best possible bid [13]

Bottom line

An at-risk delivery method is best for large projects—both complete construction and renovation—that are not easy to define, have a possibility of changing in scope, or have strict schedule deadlines. Additionally, it is an efficient method in projects containing technical complexity, multi-trade coordination, or multiple phases. [14]

Accelerated construction techniques

Starting with its Accelerated Bridge Program in the late 2000s, the Massachusetts Department of Transportation began employing accelerated construction techniques, in which it signs contracts with incentives for early completion and penalties for late completion, and uses intense construction during longer periods of complete closure to shorten the overall project duration and reduce cost. [15]

See also

Related Research Articles

A turnkey, a turnkey project, or a turnkey operation is a type of project that is constructed so that it can be sold to any buyer as a completed product. This is contrasted with build to order, where the constructor builds an item to the buyer's exact specifications, or when an incomplete product is sold with the assumption that the buyer would complete it.

<span class="mw-page-title-main">Construction</span> Process of building or assembling a building or infrastructure

Construction is a general term meaning the art and science of forming objects, systems, or organizations. It comes from the Latin word constructio and Old French construction. To 'construct' is a verb: the act of building, and the noun is construction: how something is built or the nature of its structure.

Design–build, also known as alternative delivery, is a project delivery system used in the construction industry. It is a method to deliver a project in which the design and construction services are contracted by a single entity known as the design–builder or design–build contractor. It can be subdivided into architect-led design–build and contractor-led design–build.

Project delivery methods defines the characteristics of how a construction project is designed and built and the responsibilities of the parties involved in the construction. They are used by a construction manager who is working as an agent to the owner or by the owner itself to carry-out a construction project while mitigating the risks to the scope of work, time, budget, quality and safety of the project. These risks ranges from cost overruns, time delays and conflict among the various parties.

Design–bid–build, also known as Design–tender, traditional method, or hardbid, is a project delivery method in which the agency or owner contracts with separate entities for the design and construction of a project.

A contractor or builder, is responsible for the day-to-day oversight of a construction site, management of vendors and trades, and the communication of information to all involved parties throughout the course of a building project.

A management contract is an arrangement under which operational control of an enterprise is vested by contract in a separate enterprise that performs the necessary managerial functions in return for a fee. Management contracts involve not just selling a method of doing things but actually doing them. A management contract can involve a wide range of functions such as technical operation of a production facility, management of personnel, accounting, marketing services, and training.

In the United States, the processes of government procurement enable federal, state and local government bodies in the country to acquire goods, services, and interests in real property. Contracting with the federal government or with state and local public bodies enables interested businesses to become suppliers in these markets.

A cost estimate is the approximation of the cost of a program, project, or operation. The cost estimate is the product of the cost estimating process. The cost estimate has a single total value and may have identifiable component values.

Lean construction is a combination of operational research and practical development in design and construction with an adoption of lean manufacturing principles and practices to the end-to-end design and construction process. Unlike manufacturing, construction is a project-based production process. Lean Construction is concerned with the alignment and holistic pursuit of concurrent and continuous improvements in all dimensions of the built and natural environment: design, construction, activation, maintenance, salvaging, and recycling. This approach tries to manage and improve construction processes with minimum cost and maximum value by considering customer needs.

Project engineering includes all parts of the design of manufacturing or processing facilities, either new or modifications to and expansions of existing facilities. A "project" consists of a coordinated series of activities or tasks performed by engineers, designers, drafters and others from one or more engineering disciplines or departments. Project tasks consist of such things as performing calculations, writing specifications, preparing bids, reviewing equipment proposals and evaluating or selecting equipment and preparing various lists, such as equipment and materials lists, and creating drawings such as electrical, piping and instrumentation diagrams, physical layouts and other drawings used in design and construction. A small project may be under the direction of a project engineer. Large projects are typically under the direction of a project manager or management team. Some facilities have in house staff to handle small projects, while some major companies have a department that does internal project engineering. Large projects are typically contracted out to engineering companies. Staffing at engineering companies varies according to the work load and duration of employment may only last until an individual's tasks are completed.

Construction bidding is the process of submitting a proposal (tender) to undertake, or manage the undertaking of a construction project. The process starts with a cost estimate from blueprints and material take offs.

Construction law is a branch of law that deals with matters relating to building construction, engineering, and related fields. It is in essence an amalgam of contract law, commercial law, planning law, employment law and tort. Construction law covers a wide range of legal issues including contract, negligence, bonds and bonding, guarantees and sureties, liens and other security interests, tendering, construction claims, and related consultancy contracts. Construction law affects many participants in the construction industry, including financial institutions, surveyors, quantity surveyors, architects, carpenters, engineers, construction workers, and planners.

Construction cost estimating software is computer software designed for contractors to estimate construction costs for a specific project. A cost estimator will typically use estimating software to estimate their bid price for a project, which will ultimately become part of a resulting construction contract. Some architects, engineers, construction managers, and others may also use cost estimating software to prepare cost estimates for purposes other than bidding such as budgeting and insurance claims.

Fast-track building construction is construction industry jargon for a project delivery strategy to start construction before the design is complete. The purpose is to shorten the time to completion.

Capital program management software (CPMS) refers to the systems that are currently available that help building owner/operators, program managers, and construction managers, control and manage the vast amount of information that capital construction projects create. A collection, or portfolio of projects only makes this a bigger challenge. These systems go by different names: capital project management software, construction management software, project management information systems.

Pre-construction services are services that are offered to support owners, architects, and engineers in making decisions. They are used in planning a construction project before the actual construction begins. The stage where these services are offered is called pre-construction or "pre-con".

Australian Construction Contracts govern how the parties to a construction contract behave and how the project manager and the contract manager administer the relationship between the parties. There are several popular standard forms of construction contracts that are currently used in Australia.

A construction contract is a mutual or legally binding agreement between two parties based on policies and conditions recorded in document form. The two parties involved are one or more property owners and one or more contractors. The owner, often referred to as the 'employer' or the 'client', has full authority to decide what type of contract should be used for a specific development to be constructed and to set out the legally-binding terms and conditions in a contractual agreement. A construction contract is an important document as it outlines the scope of work, risks, duration, duties, deliverables and legal rights of both the contractor and the owner.

<span class="mw-page-title-main">Lump sum contract</span>

A lump sum contract in construction is one type of construction contract, sometimes referred to as stipulated-sum, where a single price is quoted for an entire project based on plans and specifications and covers the entire project and the owner knows exactly how much the work will cost in advance. This type of contract requires a full and complete set of plans and specifications and includes all the indirect costs plus the profit and the contractor will receive progress payments each month minus retention. The flexibility of this contract is very minimal and changes in design or deviation from the original plans would require a change order paid by the owner. In this contract the payment is made according to the percentage of work completed. The lump sum contract is different from guaranteed maximum price in a sense that the contractor is responsible for additional costs beyond the agreed price, however, if the final price is less than the agreed price then the contractor will gain and benefit from the savings.

References

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Further reading