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Time and Materials Contract: This type of contract is used when there’s uncertainty about the project scope. The general contractor charges an hourly rate for labor and materials.
The purpose of these construction delivery methods is to define how the project owner, the general contractor and the licensed designer (architect or engineer) will interact throughout the project.
Design-build: In the design-build method, the design and build phases are executed by the same party known as the design-builder.
CM at risk: The CM at risk model empowers the construction manager, giving him more functions than he would normally have. In this project delivery method, the construction manager acts in two ways. On one hand, he is a consultant to the project owner during the design and development phases, and on the other hand, he monitors the contractor during the construction phase to control costs and guarantee that the project is delivered within the guaranteed maximum price.
Once the project owner has the blueprints, material take-offs, a construction project manager and a general contractor, the project can begin.
Construction project management requires a broad variety of skills, along with the ability to interface with a diverse range of agencies and people in order to lead the project from concept to build. It’s important that construction project managers follow the principles of project management during every phase of the project life cycle.
You can’t start a project unless you know you’ll be able to finish it. First comes the due diligence to determine if the project is even feasible. How do you figure this out? You want to go through a feasibility study or what is often called a business case, in which you look at the goals, cost estimates and timeline to see if you have the resources to reach a successful project end within those constraints. You also want to define the reasoning behind the project and make sure it’s sound. If so, then you create your project charter to help initiate the project. You’ll also identify potential issues and risks in this phase.
You have approval, now how are you going to achieve success? Outline the tasks within the timeline, noting project milestones, and the resources needed to do those tasks within the budget allotted. Be transparent in your project plan, so everyone is on the same page and understands what needs to be done over the life cycle of the project. That includes detailing the cost, scope, duration, quality and communications used in the project. This is also when you’ll be able to conceptualize the best project team for the project and begin the process of assembling them.
The planning phase is probably the most important project management phase because you’ll create the documents that will guide the project execution. Here are some of them:
The project schedule is a big part of the planning phase in construction project management. Here’s an example of a project schedule from ProjectManager’s free construction schedule template.
Once you’ve completed the work breakdown structure, you’ll add your tasks to the left-hand side of the construction schedule template. You can add subtasks, add resources and costs, deadlines and more. Project phases can also be color-coded. To the right is a timeline that captures the entire project plan in one place.
On the timeline side of the Gantt chart, you can link dependent tasks, set milestones and a baseline to capture the project plan to compare to your actual progress when the project is being executed. There are a lot more features to play with on the Gantt chart that will help you plan and control your project. Download the free template to practice making your own construction schedule.
Once you have a construction plan that includes all the information you need to manage costs, scope, risks, time and other aspects of your project, it’s time to execute.
At this stage, you’re executing the project and taking the project plan and implementing it while factoring in the changes and work management issues that can arise during such a process. Whatever deliverables you promised must come through in the timeframe you noted. Now, as a construction project manager, you must deal with the project owner, stakeholders and customers and teams. The latter have tasks that must be completed, which means workload management and resource allocation. You’ll be setting up meetings and reporting frequently throughout this stage. This is where your project management tool will really be tested, but more on that later.
You can’t know the progress of your project if you don’t have a way to monitor it. You’ll be doing this during the previous stages of the project, but it’s important enough to demand its own separate stage in your management. You’ll want to have a way to note the progress, which is why you need to set up key performance indicators for cost control, time tracking and quality control. If you can stay on top of these figures, it’s less likely you’ll manage a failing project. Therefore, stay flexible and communicative throughout so you can adapt quickly to change when it occurs, and it always occurs.
When you’re managing a construction job, there are certain objectives you should consider. Just like in any project, you accomplish overall project success by breaking it down into phases. The following are four steps you can take to organize a successful construction project management project.
There are four parts to designing a construction project. It’s the project manager’s responsibility to make sure your design meets with building codes and other regulations.
The concept. What are the needs, goals and objectives of the project? You’ll be making decisions based on the size of the project, the site allocated for the build and the actual design of what you’re building. This is comprised of a list for each room or space under consideration, including all critical data.
The schematic design. The schematic design is a sketch that identifies the various parts, materials, sizes, colors, textures, etc. It includes the floorplan, elevations, etc. and even a site plan.
High end/luxury house builders in the United KingdomDesign Development (DD). Design development requires research. What are the materials to use? What equipment will be needed? How much are the materials? What is the material take-off?
Once you have a design, you’ll need to use information from construction drawings and documents from the previous stage to create a bill of quantities which will specify the materials and labor that’s required. Knowing local building codes and adhering to them will be important at this stage.
Get the contract documents together. These are the final blueprints and construction specs. These will be used by outside contractors to bid on the job.
The preconstruction phase starts once the general contractor bid is accepted, but before ground is broken. During that time, you’ll want to work on these three steps.
Assign a project manager. If the project manager hasn’t already been determined, you’ll want to establish it now. Sometimes a project manager is on board early and participates in the first stages of a project, while other times they aren’t hired until the design is complete.
Determine the rest of the personnel. Find a contract administrator or the person who helps the project manager. A superintendent is also needed to keep everything on schedule in terms of the materials, deliveries and equipment. Superintendents are also on-site to deal with construction activities. Finally, you want to have a field engineer, which is more of an entry-level position to deal with paperwork.
Investigate the job site. Conduct a site analysis to understand the social, climatic and demographic variables that might affect your construction project.
Investigate the job site. Conduct a site analysis to understand the social, climatic and demographic variables that might affect your construction project.
By this point, you’ve established your team and you’ve planned for the construction and materials necessary to complete it. Now you must purchase those materials and equipment. Depending on the organization, procurement might be the responsibility of the general contractor or subcontractors.
This is the stage you’ll be working with purchase orders, which are used as an agreement between the buyer and the seller.
Finally, you’re ready for the build! But first, set a preconstruction meeting to deal with work hours, the storage of materials, quality control and site access. Then get everyone on the construction site and set up as needed.
You’ll need to create a payment schedule and a process to deliver payments. This information needs to be transparent, not only to meet financial obligations but to maintain a happy and productive workforce and environment. Make sure your work orders are detailed enough to avoid misunderstandings between you and your contractors.
The last part of the project is after the construction is complete and the occupants move into or take ownership of the site. You must make sure all their requirements have been met, and usually provide a warranty period to make that arrangement official and binding.
Construction project management software organizes the planning, scheduling, building, resources and reporting associated with construction projects. It streamlines the process and improves productivity—all while keeping to a tight schedule and budget.
Construction management software is designed to help managers control every phase of their projects by organizing its disparate parts and automating routines to add efficiencies. A construction project management tool also keeps stakeholders updated by sharing data-rich reports.
Because of the many documents related to any construction project, file storage and management of those files are also one of the key features of construction project management software. Having real-time data to foster collaboration, plan, schedule and manage resources is also an essential feature. Microsoft Project is one of the most commonly used project management software, but it has major drawbacks that make ProjectManager a better alternative.
Just as you need the right tools to build a structure, you need the right tools to manage that construction. ProjectManager provides construction project scheduling, construction project planning, construction vendor management, cost management in construction projects and other features that allow you to work more efficiently and productively.
Milestone Builders is a Luxury Project Management Company that aims to simply build and design dream living spaces, eliminating the stress of building for families and working professionals. We use our unique Milestone Method to ensure our projects are designed and built to perfection.
This stage follows the execution stage, although much monitoring happens concurrently to measure progress and quality. Now is the time to test what’s been built, address any errors or safety concerns, and train staff on how to use and maintain systems within the building or structure. It’s also a great time to register any challenges that may help future projects.
At this stage, the owners of the new building or structure are in the warranty phase. These may be contractual warranties or warranties that are in effect as part of the law for the building
This is the end of the project. The building work is complete. Construction project managers hold meetings to discuss the build and to address any areas that didn’t meet objectives and how this was addressed. Final budgets and reports are issued.
In any construction project, construction project managers are responsible for several tasks that go above and beyond a general project manager. They require specialist knowledge and experience.
During the construction phase, you are responsible for all bidding and tendering, as well as contracting workers and negotiating with contractors to secure preferable prices.
Change management is a skill that a construction project manager needs to possess. No matter how good the planning stage is, things still need to be adapted. Unforeseen circumstances will result in changes, and a construction project manager has contingency plans for different eventualities. With so many processes and people to manage, changes will likely be needed.
Part of your role is monitoring progress, conducting inspections, quality control exercises, and ensuring safety. A construction project manager records any problems or deficiencies with strategies for improvement.
Monitoring and controlling costs are essential in a project where costs can quickly add up unexpectedly, and processes are subject to change. A construction project manager's role is to budget effectively and monitor progress to ensure budgets are upheld, and everything is on schedule so extra costs can be avoided.
Construction project managers are responsible for keeping records on building work, any problems or safety concerns that need addressing, changes in budgets, and monitoring for improvements. Agreements must be reached and kept with contractors, you must write contracts, which also need to be documented.
A construction project management career requires a broad focus and skill in various areas to complete projects at a high level. Construction project managers train and gain experience to undertake projects and cover the following throughout each project they manage:
Construction project management is high-level project management, and the role requires a top level of skills and qualifications. Experience is essential, as well as proving that you have the right level of academic ability needed to do the job.
It’s possible to work your way up to a construction project management position from an entry-level construction role, but a bachelor’s degree is commonly required, especially for large-scale projects with large firms. The most effective degrees are in construction management or similar, but you can also enter the profession with a degree in civil engineering.
The role of a construction project manager requires a broad range of technical skills, given that project management software systems are used, as well as programs to draw up blueprints and track costs. A construction project management professional generally has knowledge and experience in the following:
A good construction project manager will have many project manager traits, but with the added expertise of the construction industry. If you are hoping to start your career in construction project management, consider how you will exhibit the following qualities:
Although having a certification for a construction project management career isn't essential, some companies will ask for certifications specific to the job. When this isn’t the case, you can boost your resume and verify your credentials by taking one. Certifications include:
Construction project management involves using various software and technical tools to monitor, test, track, and evaluate processes. These are essential, but which tools you use will depend on the nature of the project and the organization you work for. Some popular construction management software solutions include:
A construction project management career can take many forms, depending on the niche you choose, your skills, experience, construction project management qualifications, and preferences. Here are some roles you can pursue in construction project management:
Like the five blind men encountering different parts of an elephant, each of the numerous participants in the process of planning, designing, financing, constructing and operating physical facilities has a different perspective on project management for construction. Specialized knowledge can be very beneficial, particularly in large and complicated projects, since experts in various specialties can provide valuable services. However, it is advantageous to understand how the different parts of the process fit together. Waste, excessive cost and delays can result from poor coordination and communication among specialists. It is particularly in the interest of owners to insure that such problems do not occur. And it behooves all participants in the process to heed the interests of owners because, in the end, it is the owners who provide the resources and call the shots.
By adopting the viewpoint of the owners, we can focus our attention on the complete process of project management for constructed facilities rather than the historical roles of various specialists such as planners, architects, engineering designers, constructors, fabricators, material suppliers, financial analysts and others. To be sure, each specialty has made important advances in developing new techniques and tools for efficient implementation of construction projects. However, it is through the understanding of the entire process of project management that these specialists can respond more effectively to the owner's desires for their services, in marketing their specialties, and in improving the productivity and quality of their work.
Design and build in the United KingdomThe introduction of innovative and more effective project management for construction is not an academic exercise. As reported by the "Construction Industry Cost Effectiveness Project" of the Business Roundtable: [1]
By common consensus and every available measure, the United States no longer gets it's money's worth in construction, the nation's largest industry ... The creeping erosion of construction efficiency and productivity is bad news for the entire U.S. economy. Construction is a particularly seminal industry. The price of every factory, office building, hotel or power plant that is built affects the price that must be charged for the goods or services produced in it or by it. And that effect generally persists for decades ... Too much of the industry remains tethered to the past, partly by inertia and partly by historic divisions...
Improvement of project management not only can aid the construction industry, but may also be the engine for the national and world economy. However, if we are to make meaningful improvements, we must first understand the construction industry, its operating environment and the institutional constraints affecting its activities as well as the nature of project management.
The acquisition of a constructed facility usually represents a major capital investment, whether its owner happens to be an individual, a private corporation or a public agency. Since the commitment of resources for such an investment is motivated by market demands or perceived needs, the facility is expected to satisfy certain objectives within the constraints specified by the owner and relevant regulations. With the exception of the speculative housing market, where the residential units may be sold as built by the real estate developer, most constructed facilities are custom made in consultation with the owners. A real estate developer may be regarded as the sponsor of building projects, as much as a government agency may be the sponsor of a public project and turns it over to another government unit upon its completion. From the viewpoint of project management, the terms "owner" and "sponsor" are synonymous because both have the ultimate authority to make all important decisions. Since an owner is essentially acquiring a facility on a promise in some form of agreement, it will be wise for any owner to have a clear understanding of the acquisition process in order to maintain firm control of the quality, timeliness and cost of the completed facility.
From the perspective of an owner, the project life cycle for a constructed facility may be illustrated schematically in Figure 1-1. Essentially, a project is conceived to meet market demands or needs in a timely fashion. Various possibilities may be considered in the conceptual planning stage, and the technological and economic feasibility of each alternative will be assessed and compared in order to select the best possible project. The financing schemes for the proposed alternatives must also be examined, and the project will be programmed with respect to the timing for its completion and for available cash flows. After the scope of the project is clearly defined, detailed engineering design will provide the blueprint for construction, and the definitive cost estimate will serve as the baseline for cost control. In the procurement and construction stage, the delivery of materials and the erection of the project on site must be carefully planned and controlled. After the construction is completed, there is usually a brief period of start-up or shake-down of the constructed facility when it is first occupied. Finally, the management of the facility is turned over to the owner for full occupancy until the facility lives out its useful life and is designated for demolition or conversion.
Of course, the stages of development in Figure 1-1 may not be strictly sequential. Some of the stages require iteration, and others may be carried out in parallel or with overlapping time frames, depending on the nature, size and urgency of the project. Furthermore, an owner may have in-house capacities to handle the work in every stage of the entire process, or it may seek professional advice and services for the work in all stages. Understandably, most owners choose to handle some of the work in-house and to contract outside professional services for other components of the work as needed. By examining the project life cycle from an owner's perspective we can focus on the proper roles of various activities and participants in all stages regardless of the contractual arrangements for different types of work.
In the United States, for example, the U.S. Army Corps of Engineers has in-house capabilities to deal with planning, budgeting, design, construction and operation of waterway and flood control structures. Other public agencies, such as state transportation departments, are also deeply involved in all phases of a construction project. In the private sector, many large firms such as DuPont, Exxon, and IBM are adequately staffed to carry out most activities for plant expansion. All these owners, both public and private, use outside agents to a greater or lesser degree when it becomes more advantageous to do so.
In the United States, for example, the U.S. Army Corps of Engineers has in-house capabilities to deal with planning, budgeting, design, construction and operation of waterway and flood control structures. Other public agencies, such as state transportation departments, are also deeply involved in all phases of a construction project. In the private sector, many large firms such as DuPont, Exxon, and IBM are adequately staffed to carry out most activities for plant expansion. All these owners, both public and private, use outside agents to a greater or lesser degree when it becomes more advantageous to do so.
The project life cycle may be viewed as a process through which a project is implemented from cradle to grave. This process is often very complex; however, it can be decomposed into several stages as indicated by the general outline in Figure 1-1. The solutions at various stages are then integrated to obtain the final outcome. Although each stage requires different expertise, it usually includes both technical and managerial activities in the knowledge domain of the specialist. The owner may choose to decompose the entire process into more or less stages based on the size and nature of the project, and thus obtain the most efficient result in implementation. Very often, the owner retains direct control of work in the planning and programming stages, but increasingly outside planners and financial experts are used as consultants because of the complexities of projects. Since operation and maintenance of a facility will go on long after the completion and acceptance of a project, it is usually treated as a separate problem except in the consideration of the life cycle cost of a facility. All stages from conceptual planning and feasibility studies to the acceptance of a facility for occupancy may be broadly lumped together and referred to as the Design/Construct process, while the procurement and construction alone are traditionally regarded as the province of the construction industry.
Owners must recognize that there is no single best approach in organizing project management throughout a project's life cycle. All organizational approaches have advantages and disadvantages, depending on the knowledge of the owner in construction management as well as the type, size and location of the project. It is important for the owner to be aware of the approach which is most appropriate and beneficial for a particular project. In making choices, owners should be concerned with the life cycle costs of constructed facilities rather than simply the initial construction costs. Saving small amounts of money during construction may not be worthwhile if the result is much larger operating costs or not meeting the functional requirements for the new facility satisfactorily. Thus, owners must be very concerned with the quality of the finished product as well as the cost of construction itself. Since facility operation and maintenance is a part of the project life cycle, the owners' expectation to satisfy investment objectives during the project life cycle will require consideration of the cost of operation and maintenance. Therefore, the facility's operating management should also be considered as early as possible, just as the construction process should be kept in mind at the early stages of planning and programming.
Since most owners are generally interested in acquiring only a specific type of constructed facility, they should be aware of the common industrial practices for the type of construction pertinent to them. Likewise, the construction industry is a conglomeration of quite diverse segments and products. Some owners may procure a constructed facility only once in a long while and tend to look for short term advantages. However, many owners require periodic acquisition of new facilities and/or rehabilitation of existing facilities. It is to their advantage to keep the construction industry healthy and productive. Collectively, the owners have more power to influence the construction industry than they realize because, by their individual actions, they can provide incentives or disincentives for innovation, efficiency and quality in construction. It is to the interest of all parties that the owners take an active interest in the construction and exercise beneficial influence on the performance of the industry.
In planning for various types of construction, the methods of procuring professional services, awarding construction contracts, and financing the constructed facility can be quite different. For the purpose of discussion, the broad spectrum of constructed facilities may be classified into four major categories, each with its own characteristics.
Residential housing construction includes single-family houses, multi-family dwellings, and high-rise apartments. During the development and construction of such projects, the developers or sponsors who are familiar with the construction industry usually serve as surrogate owners and take charge, making necessary contractual agreements for design and construction, and arranging the financing and sale of the completed structures. Residential housing designs are usually performed by architects and engineers, and the construction executed by builders who hire subcontractors for the structural, mechanical, electrical and other specialty work. An exception to this pattern is for single-family houses which may be designed by the builders as well.
The residential housing market is heavily affected by general economic conditions, tax laws, and the monetary and fiscal policies of the government. Often, a slight increase in total demand will cause a substantial investment in construction, since many housing projects can be started at different locations by different individuals and developers at the same time. Because of the relative ease of entry, at least at the lower end of the market, many new builders are attracted to the residential housing construction. Hence, this market is highly competitive, with potentially high risks as well as high rewards.
Institutional and commercial building construction encompasses a great variety of project types and sizes, such as schools and universities, medical clinics and hospitals, recreational facilities and sports stadiums, retail chain stores and large shopping centers, warehouses and light manufacturing plants, and skyscrapers for offices and hotels. The owners of such buildings may or may not be familiar with construction industry practices, but they usually are able to select competent professional consultants and arrange the financing of the constructed facilities themselves. Specialty architects and engineers are often engaged for designing a specific type of building, while the builders or general contractors undertaking such projects may also be specialized in only that type of building.
Because of the higher costs and greater sophistication of institutional and commercial buildings in comparison with residential housing, this market segment is shared by fewer competitors. Since the construction of some of these buildings is a long process which once started will take some time to proceed until completion, the demand is less sensitive to general economic conditions than that for speculative housing. Consequently, the owners may confront an oligopoly of general contractors who compete in the same market. In an oligopoly situation, only a limited number of competitors exist, and a firm's price for services may be based in part on its competitive strategies in the local market.
Specialized industrial construction usually involves very large scale projects with a high degree of technological complexity, such as oil refineries, steel mills, chemical processing plants and coal-fired or nuclear power plants. The owners usually are deeply involved in the development of a project, and prefer to work with designers-builders such that the total time for the completion of the project can be shortened. They also want to pick a team of designers and builders with whom the owner has developed good working relations over the years.
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