Construction Project Management

CONSTRUCTION PROJECT
MANAGEMENT

A background of Construction
Industry
 Construction industry is the largest industry
in the world
 It consumes a wide employment circle of
labor
 It exhibits costs overruns, time extension, and
conflicts among parties.
 Intricate and time consuming undertakings
 During the construction process itself , work
will involve many skills, materials and
hundreds of operations

 Cost overruns-
 also known as a cost increase, underrated or
budget overrun, involves unexpected costs
incurred in excess of budgeted amounts due to an
underestimation of the actual cost during
budgeting.

Challenges of construction
Industry
 Its unique nature and every project is one of a
kind
 Many conflicting parties are involved
 Project is constrained by time, money and
quality
 High risk

Characteristics of
construction Industry
 A defined goal or objective
 Specific task to be performed
 A defined beginning and end
 Resources being consumed

Construction Project
Participants
 Architects
 Engineers
 Building tradesman
 Sub contractors
 Material dealers
 Inherent components
 Subsoil conditions
 Surface topography
 Weather
 Transportation
 Material supply
 Labor conditions
 Technology

Construction Parameters
 Deliverables
 These are tangible products, services and results
that you will produce during the project
 Key dates
 Completion Criteria
 Expectations
 Potential Risks

Project Stages
 A. Planning and Definition
 B. Design
 C. Procurement and Construction

Participants
 Owner
 Whether public or private , is the instigating party
that gets the project financed, design and built
 For public owners, must proceed with applicable
statutes and administrative directives pertaining
for advertising for bids, bidding procedure,
construction contracts, administration and other
matters
 Private owners maybe individuals, partnership
and corporation, for their own use or for sell ,
lease and rent.

Participants
 ARCHITECT-ENGINEER
 Is the design arm of the owner
 Is a private and independent design firm that
accomplishes the design under contract with the
owner.
 Or a part of construction contractor in case of
design and construction mode.

Participants
 PRIME CONTRACTOR
 Is the firm that is the prime contract with the
owner for the construction of the project either its
entirety or some designated portion
 Could be a single contract system or separate
contracts

BIDDING
- Complete proposal submitted in competition
with other bidders, to execute specified jobs,
within a prescribed time and not exceeding a
proposed amount , that usually includes
labor, materials and equipment.
- The bid receiving party may reject the bid,
make a counter offer or turn it into a binding
contract by accepting it.

Bidding Types
 Competitive Bidding
 The most standard system especially in
government projects
 Bid prices quoted by the contractors will be the
basis of awards, where the lowest bidder usually
winning the awards.

Bidding Types
 Negotiated Contracts
 Awarded on the basis of direct agreement with
the contractor without going through the
competitive bidding process.
 It includes terms and provisions that are usually
mutually agreed upon to both parties.

Bidding Types
 Combined Bidding and Negotiations
 Bids are submitted by the qualified contractors,
and each should tender proposals and
suggestions on how to reduced the cost of the
project.

Bidding Types
 Sub-contracting
 The extent to which general contractor will
subcontract depends greatly on the nature of the
project and the contractors own organization.

Bidding Types
 Design-bid- Construct
 Most common type especially for government
projects where field construction is not started
before the architect-designer finalized the design.
 Possible to reduce project cost but sometimes
slows down the completion time of the projects

Bidding Types
 FastTracking
 Overlapping accomplishment of project design
and construction.
 As the design of the progressive phases of the
work is finalized , these work packages are put
under contract, a process also called phased
construction.
 This could reduce the total time required to
achieve project completion.

Bidding Types
 Fixed Sum Contract
 Requires the contractor to complete the defined
package of work in exchange for the sum of
money fixed by the contract.
 Should the actual cost exceeds the figure, the
contractor absorbs the loss.
 May either be a lump sum or unit price.

Bidding Types
 Cost plus Fee
 Owner reimburses the owner for all the
construction costs and pay the for services
rendered.
 How the contractors fee is determined is
stipulated in the contract and a number of
different procedures are used in this regard.
 Incentives and bonuses are given to the contractor
to expedite the work.

Bidding Types
 Work by Force Account
 The owner may elect to act as the contractor
rather than have the work done by the
professional contractor.
 The owner may accomplish the work with its own
forces , provide supervision, materials and
equipment itself, or he may have the work to be
sub contracted.

Bidding Types
 Turn key System
 The owners provide the facility requirements, to
the contractor, which designs and contracts the
facility under a single contract.
 The single contracts eliminate the owner
coordination and eliminates the project duration.
 Upon the completion, the key to the project is
turned over to the owner and the contract is
closed.

Bidding Types
 Speculative Construction
 When owners build structures for lease, sale , to
other parties, like housing and shopping centers
and warehouse facilities.
 The developer act as their own contractors.
 They build dwelling units in their own account
and employ sales to market for their product.

The construction Industry
 Residential construction
 Building construction (Institutional and
commercial)
 Heavy construction
 Industrial construction

Residential construction
 Low Capital
 30-35% of the industry
 Single Family, Multi Family, high rise
apartments

Building construction
 30-45 % of the industry market
 Larger and more complex than residential
 Various Owners
 Types
 Schools
 Hospitals
 Recreational facilities
 Hotels
 Office buildings

Heavy construction
 20-25% of the industry market
 Horizontal construction
 Mostly public financing or large consortium
 Constructors need knowledge of engineering
and geology
 Engineers and builders are often specialized
 Contracts awarded through competitive bidding
 Types (highways, bridges, ports, terminals,
dams,pipeline,power and communication
network)

Industrial construction
 Very large scale project
 High Degree ofTechnological Complexity
 Designed and built by largest firms with
technical sophistication
 Represents 5-10% of the market

 Complex mechanical systems, process piping,
and instrumentation
 • Civil, but also mechanical, chemical, and
electrical engineering disciplines involved •
Mostly private ownership
 • Negotiated contracts are typical
 • “Turnkey” contract arrangements are common
• Design-constructor must be intimately familiar
with the technology and operations of the
facility36 Industrial Construction

 Petroleum refineries
 •Steel mills & aluminum plants •Chemical
processing plants
 •Fossil fuel & nuclear power plants
 •Other heavy manufacturing facilities 37
Industrial Construction

Construction Management
Is the over all planning , coordination and control
of a project from beginning to end. It aimed at
meeting clients requirement in order to produce a
functionally and financially viable project.
“A project is a one-shot, time-limited, goal-directed, major
undertaking, requiring the commitment of varied skills
and resources”.
Or
“The art and science of coordinating people, equipment,
materials, money, and schedules to complete a specified
project on time and within approved cost.”

Construction Management
Functions
 Coordination
 Planning and Scheduling
 Purchasing and expediting
 Supervision
 Cost control
 Documentation and Reporting
 Quality control
 Estimating
 Safety and risk Management
 Contract Administration
 Claims Analysis

PLANNING
 is a fundamental and challenging activity in
the management and execution of
construction projects
 It involves the choice of technology, the
definition of work tasks, the estimation of the
required resources and durations for
individual tasks, and the identification of any
interactions among the different work tasks.
 A good construction plan is the basis for
developing the budget and the schedule for
work

COORDINATION
 To ensure quality construction projects, we
manage schedules, budgets, payments, and
required testing and inspection
 Oversee contractor performance for
compliance with construction documents, the
approved schedule, quality of workmanship,
quality and quantity of materials, and
construction industry standards

CONTROL
 procedures for project control and record
keeping become indispensable tools to
managers and other participants in the
construction process
 recording the financial transactions that
occur as well as giving managers an
indication of the progress and problems
associated with a project.

Limitation of Authority
 The PM shall not involve himself directly with
the work of the contractor.
 He shall not impose methods, systems or
designs that will affect substantially the
schedule and the design and concept of the
architect.
 He shall not interfere with the architects
design if such designs generate the necessary
environmental and aesthetic quality of the
project.

The Architect
as PROJECT MANAGER

Pre-Construction phase
 Review architectural and
engineering drawings and
specifications, for the
purpose of advising on
appropriate alternates,
materials construction
systems and the possible
design cost implications of
local availability of materials
and labor.
 Make projections and
schedules of the construction
activity.
 Coordinate with the design
professionals.

Construction phase
 Review plans and documents for
Construction.
 Assists owner to pre-qualify
Suppliers, General Contractors &
Sub-contractors.
 Conduct pre-bidding
conferences to local suppliers
and sub-contractors.
 Assists the Owner issue Notices
of Award and Notices to
Proceed.
 Conducts Pre-construction
meetings with awarded local
suppliers and sub-contractors.

Construction phase
 Assists the Contractors to set up
quality control.
 Inspect works in progress to
make sure that Plans and
Specifications are followed.
 Coordinate with Designers for
construction queries and
verifications on site.
 Witness test of materials and
equipment to ensure that Plans
and Specifications are being
followed.

Billings
 Review all applications for
progress billing by
Contractors and Suppliers
the submit
recommendations to
Owner and Consultants.
 Review documents and
monitor all change orders
for legitimacy and fairness

Project Administration
 Conducts a weekly site
coordination meetings and prepare
minutes to be submitted to
Consultants and Owner.
 Issue non-compliance notices to
Contractors and Suppliers if they
fail to comply with their contractual
obligations.
 Coordinate with Consultants and
Contractors regarding issuances,
clarifications, and interpretations of
plans and specifications.
 Prepares purchasing schedule
for Owner Supplier Materials
(OSM) to guide the Owner

Project Administration
 Coordinate delivery of OSM.
 Inspect OSM before turn-over to
Contractors.
 Maintains filing of project records, jobsite
logbooks, change order documents, billings
of contractors & suppliers, submittals, shop
drawings, minutes of meetings, test results
and other construction documents.
 Establishes safety, sanitations and security
requirements. Monitors compliance of
Contractors with these

Post Construction
 Conducts inspection with the Owner
and Consultants upon the advice of
Contractors.
 Prepare final punch list showing the
items that needs to be corrected.
 Assist the Owner test equipment and
make final adjustments.
 Review as-built drawings, equipment
operating and maintenance manuals
submitted by the Contractors and
Suppliers.
 Assist the Owner issuance of
acceptance certificates.

Functions
 Coordination and supervision
 Cost and time control
 Quality control of works and keeping of
Records

Limitation of authority
 The PM shall not involve himself directly with
the work of the contractor.
 He shall not impose methods, systems or
designs that will affect substantially the
schedule and the design and concept of the
architect.
 He shall not interfere with the architects
design if such designs generate the necessary
environmental and aesthetic quality of the
project.

Legal Responsibility
 He reports directly to the owner
 He has no legal responsibility should the
equipment fail to function or should a portion
of the building collapses.

Qualification
 Maybe an individual or a firm
 The individual or principal of the firm must be
a professional preferably an architect or
engineer, long experienced in the
construction field and possessed with
managerial talent and capabilities.
 Those who were contractors or have been
responsible in charge of construction.

The PM contract
 The contract are professional service contracts
negotiated between the owner and construction
manager. A basic fixed fee of 1 ½ to 3% of the
total construction cost
 Other contracting agreement includes:
 1.Award fee provisions
 2.Price Adjustment provisions
 3.Operating and support cost factor provision.
 4.Firm fixed price
 5. fixed price incentive
 6. cost plus fixed fee

The Worksheet
 The logical construction sequence that must
be followed
 The quantity and the delivery date of various
materials to be used.
 How much and what kind of manpower will
be needed.
 When to start and complete the project on
time

Preliminaries in Organizing a
construction Job
 Project Undergoes series of stages
 Planning
 Execution of major activities
 Project phase out

Main objectives
 To secure necessary licenses and building permits
 Prepare a time and progress chart
 Have an access to the site or a temporary roadway
 Construction of boarding and temporary shed
 Construction of temporary field office
 Cleaning and levelling the site
 Demolition of existing structures
 Disposal of materials obtain from the demolition
 Shoring of the adjoining structures
 Arrangement for temporary water and electric supply
 Provisions for drain and soak-ways
 General site problems including any special features.

Project construction life cycle
requirements
 The site must be found and boundaries be
located
 Plan must be drawn
 Plan must be approved by the owner
 Building permit must be secured
 Succession of personel follows

Planning program and progress
chart
 Important part of works organizations are:
 The preparation of the comprehensive time
and progress chart for the execution of work
 The periodic revision of the chart as
circumstances demands, and regular
comparison of progress chart made with the
program.

Material Supply
 A very important in all construction works.
Materials should have scheduled delivery.
 There should be a purchasing program for
construction materials.

Procurement Process
 Functions of the Procurement Department
 1. Know and maintain records showing the materials , and their
possible substitute, sources of supply, quantities available and
prices.
 2. Review specifications for possible simplifications and
standardization of materials for unreasonable requirements.
 3. Negotiate with suppliers for possible extension of credit.
 4. Gather and analyze price quotations and flactuations
 5. Place order with suppliers
 6. Follow up purchase orders for delivery as specified
 7. Audit invoices to check compliance with agreed terms and
conditions.
 8. Maintain records of all purchases
 9. Coordinate with other areas on all matters pertaining to
procurement.

Inventory control: functions
 1.They act as safety stock of materials or in
effect, short term insurance againts
fluctuations in supply.
 2. Inventories permit a company to operate
with disconnected processes in the
construction and disbursement cycle

Site Management work
 1. Safety in the project construction must be a
primary consideration.
 2.The immediate supervisor’s responsibility to see to
it that the working place that the working place is
properly arranged and maintained, that everything
be in safe operating condition.
 3. some possible provision for safety:
 A. minimize manual handling hazards of materials
 B. locate control and fuse panels where they can be
reached safely
 C. install strong and rigid forms and scaffoldings
 D. insulate all live wires and screen high pressure areas.
 E. prevention of occupational disease and fire protection

Planned Maintenance
 It is a pre requisite to efficient operation and uninterrupted
construction activities.
 Has long been an economic neccessity for construction
equipment which must operate under a continuous
process.
 Preventive procedures that should be carried out:
 1. Down time of each equipment for servicing is planned in
advance.
 2. important items or equipments that require regular clean up
should be ready at hand for substitution at any time of failure.
 3. Records should be maintained and analysis made of repetitive
failure.
 4. Regular and prescribe inspection should be made for signs and
impending failure.

 LABOR, MATERIAL AND
EQUIPMENT UTILIZATION

Labour material and
equipment
 Good project management in construction
must vigorously pursue the efficient
utilization of labor, material and equipment.
 Material handling which include procurement
, inventory, shop fabrication and field
servicing requires special attention for cost
reduction.
 Ultimately, decisions for actions not plans will
dictate future outcomes.

LABOR
 The aggregate of all human physical and mental
effort used in creation of goods and services.
 Labor is a primary factor of production.The size
of a nation's labor force is determined by the size
of its adult population, and the extent to which
the adults are either working or are prepared to
offer their labor for wages.


MATERIAL
 Article, item, material, or supply consumed or
used in a construction project and
incorporated in the constructed building or
structure.

EQUIPMENTS
 Quantities of construction-related objects
include many types of equipment, vehicles,
and supporting structures used during the
construction phase of a structure or module.

Kinds of construction labor
 Labourer
 Masons
 Carpenters
 Plumber
 Electrician
 Welder
 Roof installer
 Painter
 Glass installer
 Foreman/Leadman

Labour Productivity
 Productivity in construction is often broadly
defined as output per labor hour.
 Since labor constitutes a large part of the
construction cost and the quantity of labor
hours in performing a task in construction is
more susceptible to the influence of
management than are materials or capital,
this productivity measure is often referred to
as labor productivity

Labor Productivity
 Contractors and owners are often
concerned with the labor activity at
job sites. For this purpose, it is
convenient to express labor
productivity as functional units per
labor hour for each type of
construction task.

Factors affecting
Labor Productivity
 age, skill and experience of workforce
 leadership and motivation of workforce
 The project work conditions include among other
factors: Job size and complexity.
 Job site accessibility.
 Labor availability.
 Equipment utilization.
 Contractual agreements.
 Local climate.
 Local cultural characteristics, particularly in foreign
operations.

Labor Productivity
 Indirect labor required to maintain the progress
of the project
 Rework for correcting unsatisfactory work
 Temporary work stoppage due to inclement
weather or material shortage
 Time off for union activities
 Absentee time, including late start and early
quits
 Non-working holidays
 Strikes

Labor characterisitcs
 Quality ofWork -
 Quantity ofWork -
 Job Knowledge -
 RelatedWork Knowledge -
 Judgment -
 Initiative -
 Resource Utilization -
 Dependability -
 Analytical Ability -
 Communicative Ability -
 Interpersonal Skills -

 Communicative Ability -
 Interpersonal Skills -
 Ability toWork Under Pressure -
 Security Sensitivity -
 Safety Consciousness -
 Profit and Cost Sensitivity -
 Planning Effectiveness -
 Leadership -
 Delegating -

 These different factors could each be
assessed on a three point scale: (1)
recognized strength, (2) meets expectations,
(3) area needing improvement. Examples of
work performance in these areas might also
be provided.

Material Management
 Materials management is an important element
in project planning and control. Materials
represent a major expense in construction, so
minimizing procurement or purchase costs
presents important opportunities for reducing
costs.

Material Management
 Poor materials management can also result in
large and avoidable costs during
construction. First, if materials are purchased
early, capital may be tied up and interest
charges incurred on the excess inventory of
materials
 Accordingly, insuring a timely flow of
material is an important concern of project
managers.

Material Management
 Materials management is not just a concern
during the monitoring stage in which
construction is taking place
 Decisions about material procurement may
also be required during the initial planning
and scheduling stages
 Materials management is also a problem at
the organization level if central purchasing
and inventory control is used for standard
items.

Material Management
 Materials ordering problems lend themselves
particularly well to computer based systems
to insure the consistency and completeness
of the purchasing process

Procurement Process
 This maintains the standard and quality of
the materials delivered on site.
 Major procurement factors are:
 1. Quality of materials
 2. quantity of materials
 3.Time of Delivery
 4. Price of the materials

Benefits of materials
management
 From a study of twenty heavy construction sites, the following benefits
from the introduction of materials management systems were noted:
 In one project, a 6% reduction in craft labor costs occurred due to the
improved availability of materials as needed on site. On other projects,
an 8% savings due to reduced delay for materials was estimated.
 A comparison of two projects with and without a materials management
system revealed a change in productivity from 1.92 man-hours per unit
without a system to 1.14 man-hours per unit with a new system. Again,
much of this difference can be attributed to the timely availability of
materials.
 Warehouse costs were found to decrease 50% on one project with the
Against these various benefits, the costs of acquiring and maintaining a
materials management system has to be compared. However,
management studies suggest that investment in such systems can be
quite beneficial.

Material Procurement and
Delivery
 The main sources of information for feedback and
control of material procurement are requisitions,
bids and quotations, purchase orders and
subcontracts, shipping and receiving documents,
and invoices. For projects involving the large scale
use of critical resources, the owner may initiate the
procurement procedure even before the selection of
a constructor in order to avoid shortages and delays.
 Some overlapping and rehandling in the
procurement process is unavoidable, but it should be
minimized to insure timely delivery of the materials
in good condition.

 The materials for delivery to and from a
construction site may be broadly classified as:
 1. bulk materials
 2. standard off the shelf materials
 3. fabricated members of units

 BULK MATERIALS
 refer to materials in their natural or semi-processed
state, such as earthwork to be excavated, wet
concrete mix, etc. which are usually encountered in
large quantities in construction. Some bulk materials
such as earthwork or gravels may be measured in
bank (solid in situ) volume. Obviously, the quantities
of materials for delivery may be substantially
different when expressed in different measures of
volume, depending on the characteristics of such
materials.

 Standard off the shelf Materials
 piping and valves are typical examples of standard
off-the-shelf materials which are used extensively
in the chemical processing industry. Since
standard off-the-shelf materials can easily be
stockpiled, the delivery process is relatively
simple.

 FABRICATED MEMBERS AND UNITS
 such as steel beams and columns for buildings are
pre-processed in a shop to simplify the field
erection procedures.Welded or bolted
connections are attached partially to the
members which are cut to precise dimensions for
adequate fit.

Typical Procurement Process
 Requisition ready by designer
Owner approval
Inquiry issued to vendors
Vendor quotations received
Complete bid evaluation by designer
Owner approval
Place purchase order
Receive preliminary shop drawings
Receive final design drawings
Fabrication and delivery

Inventory Control
 Once goods are purchased, they represent
an inventory used during the construction
process.The general objective of inventory
control is to minimize the total cost of keeping
the inventory while making tradeoffs among the
major categories of costs:
 purchase costs
 order cost
 holding costs
 unavailable cost

Purchase cost
 is the unit purchase price from an external source
including transportation and freight costs. For
construction materials, it is common to receive
discounts for bulk purchases, so the unit
purchase cost declines as quantity increases.
These reductions may reflect manufacturers'
marketing policies, economies of scale in the
material production, or scale economies in
transportation.There are also advantages in
having homogeneous materials.

Order cost
 reflects the administrative expense of issuing
a purchase order to an outside supplier. Order
costs include expenses of making
requisitions, analyzing alternative vendors,
writing purchase orders, receiving materials,
inspecting materials, checking on orders, and
maintaining records of the entire process

Holding cost
 are primarily the result of capital costs,
handling, storage, obsolescence, shrinkage
and deterioration.
 Capital cost results from the opportunity cost
or financial expense of capital tied up in
inventory.
 Once payment for goods is made, borrowing
costs are incurred or capital must be diverted
from other productive uses.

Unavailability cost
 is incurred when a desired material is not
available at the desired time.
 In manufacturing industries, this cost is often
called the stockout or depletion cost.
 Shortages may delay work, thereby wasting
labor resources or delaying the completion of
the entire project

Construction Equipment
 The selection of the appropriate type and size
of construction equipment often affects the
required amount of time and effort and thus
the job-site productivity of a project. It is
therefore important for site managers and
construction planners to be familiar with the
characteristics of the major types of
equipment most commonly used in
construction

PERT
 Project Evaluation and ReviewTechnique
 is a method to analyze the involved tasks in
completing a given project, especially the time
needed to complete each task, and to identify the
minimum time needed to complete the total
project.
 PERT was developed primarily to simplify the
planning and scheduling of large and complex
projects. It was developed for the U.S. Navy
Special Projects Office in 1957 to support the U.S.
Navy's Polaris nuclear submarine project

CPM
 Critical Path Method
 Was designed as a tool for planning , scheduling,
and control of construction. Its emphasis was on
the work or activities to be managed

PERT CPM
 Is a control tool for defining the parts of the
construction job then putting them together
in a network form.

Advantages
 PERT/CPM chart explicitly defines and makes visible
dependencies (precedence relationships) between the work
breakdown structure elements.
 PERT/CPM facilitates identification of the critical path and makes
this visible.
 PERT/CPM facilitates identification of early start, late start, and
slack for each activity.
 PERT/CPM provides for potentially reduced project duration due
to better understanding of dependencies leading to improved
overlapping of activities and tasks where feasible.
 The large amount of project data can be organized & presented
in diagram for use in decision making.
 PERT/CPM can provide a probability of completing before a
given time

 PERT/CPM indicates the earliest starting date for
each work operations and sub contracts for
supply and delivery of materials.
 It shows the most advantageous scheduling for
all operations.This gives planning information as
to time and cost in choosing methods ,
equipment, crew and work hours.
 With the critical path schedule as revised to
reflect the change order, any claim if any, would
be understood both by owner and contractors.

Disadvantages
 There can be potentially hundreds or thousands
of activities and individual dependency
relationships.
 PERT is not easily scalable for smaller projects.
 The network charts tend to be large and
unwieldy requiring several pages to print and
requiring specially sized paper.
 The lack of a timeframe on most PERT/CPM
charts makes it harder to show status although
colours can help (e.g., specific colour for
completed nodes).

Three Phases of PERT CPM
 Planning
 Scheduling
 Controlling

 Planning
 Is defined as determining the relationship
between the work operation and the sequence in
which they are to be performed

 SCHEDULING
 is defined as the process of transferring the arrow
diagram into timetable of calendar days.
 It involves distribution of work time to each work
operation and determining when to start and
when to finish

 CONTROLLINGAND MONITORING
 Updated re computation brought about by
changing conditions is the key to succesful
network programming

Construction Project Management

Construction Project Management

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