Construction management


Construction management
A two-level retail store under construction in Canada (2011).

Construction Project Management is the overall planning, coordination and control of a project from inception to completion aimed at meeting a client’s requirements in order to produce a functionally and financially viable project that will be complete mingement (CPM) is project management that applies to the construction sector (3rd Forum ”International Construction Project Management” 26th/27 June 2003 in Berlin).

The Construction Management Association of America (CMAA) (a primary US construction management certification and advocacy body) says the 120 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 which includes specific activities like defining the responsibilities and management structure of the project management team, organizing and leading by implementing project controls, defining roles and responsibilities and developing communication protocols, and identifying elements of project design and construction likely to give rise to disputes and claims.

Contents

Functions

The functions of construction project management typically include the following[1] :

  1. Specifying project objectives and plans including delineation of scope, budgeting, scheduling, setting performance requirements, and selecting project participants.
  2. Maximizing 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

Terminology

The Berlin Brandenburg Airport under construction.

Construction management (CM): UK: 1. management of the site. 2. form of delivery[2] USA: form of delivery (compare above)

Real estate management (REM): professional property advice (as opposed to a project, REM is a continuous process)

Corporate real estate management (CREM): REM focused on a company’s property Management contracting (MC): UK: form of delivery[3] USA: CM at risk

Programme management (ProgM): UK: 1. programme management is concerned with managing time in a project and is thereby part of the CPM function. 2. management of a client’s portfolio (client’s programme in this sense is equivalent to a client’s brief) USA: management of a client’s portfolio (compare above)

Project control (PC): The PC function is concerned with gathering data regarding project progress, producing progress reports, monitoring time, cost, and quality. Compared to the CPM function, the PC function can be characterised to be passive, whereas a construction project manager needs to take action.

Project leader (PL): The PL is responsible for achieving the project’s objectives. He is the manager “in line”.

Project director (PD): The PD is the leader of a big project that can be broken down in sub-projects (e.g. Channel tunnel). He can also be the head of a PM organisation. OR: The OR is the representative of the owner. This function can be provided either internally or externally.

DC: Document Control - A key function of a Project Manager.

FBOT: finance build operate transfer

BOT: build operate transfer

DBOT: design build operate transfer

BOO: build own operate

EPC: engineering procurement construction

PFI: private finance initiative

GC: general contractor

GMP: Guaranteed maximum price

MPC: multiple prime contracts: UK: one contractor takes responsibility for the development (package deal) USA: a client may have 5 or 6 prime contractors

Study and practice

Construction Management education comes in a variety of formats: formal degree programs (one-year associate degree; four-year baccalaureate degree, masters degree, project management, operations management engineer degree, doctor of philosophy degree, postdoctoral researcher); on-job-training; and continuing education / professional development. For information on degree programs, reference ACCE, the American Council for Construction Education, or ASC, the Associated Schools of Construction.

According to the American Council for Construction Education (the academic accrediting body of construction management educational programs in the U.S.), the academic field of construction management encompasses a wide range of topics. These range from general management skills, to management skills specifically related to construction, to technical knowledge of construction methods and practices. There are many schools offering Construction Management programs, including some that offer a Masters degree.[4][5]

Business model

Skyscrapers under construction in Panama City, Panama.

Typically the construction industry includes three parties: an owner, a designer (architect or engineer), the builder (usually called the general contractor). Traditionally, there are two contracts between these parties as they work together to plan, design, and construct the project. The first contract is the owner-designer contract, which involves planning, design, and construction administration. The second contract is the owner-contractor contract, which involves construction. An indirect, third-party relationship exist between the designer and the contractor due to these two contracts.

An alternate contract or business model replaces the two traditional contracts with three contracts: owner-designer, owner-construction project manager, and owner-builder. The construction project management company becomes an additional party engaged in the project to act as an advisor to the owner, to which they are contractually tied. The construction manager's role is to provide construction advice to the designer, on the owner's behalf, design advice to the constructor, again on the owner's behalf, and other advice as necessary.

Design, bid, build contracts

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

Design and build contracts

Recently a different business model has become more popular. Many owners – particularly government agencies have let out contracts which are known as Design-Build contracts. In this type of contract, the construction team is known as the design-builder. They are responsible for taking a concept developed by the owner, completing the detailed design, and then pending the owner's approval on the design, they can proceed with construction. Virtual Design and Construction technology has enabled much of the ability of contractors to maintain tight construction time

There are two main advantages to using a design-build contract. First, the construction team is motivated to work with the design team to develop a design with constructability in mind. In that way it is possible for the team to creatively find ways to reduce construction costs without reducing the function of the final product. The owner can expect a reduced price due to the increased constructability of the design.

The other major advantage involves the schedule. Many projects are given out with an extremely tight time frame. By letting out the contract as a design-build contract, the contractor is established, and early mobilization and construction activities are able to proceed concurrently with the design. Under a traditional contract, construction cannot begin until after the design is finished, the project is bid and awarded, and the team can mobilize. This type of contract can take months off the finish date of a project.

The major problem[6] with design-build contracts is the inherent conflict of interest. In a standard contract the designer is responsible to the owner to review the work of the builder to be sure the products and methods meet specifications and codes. The builder as a construction professional experienced working with many designers is attuned to picking up design flaws which would go uncaught or unmentioned when builder is also designer. The owner may be more likely to get a building that is over-designed in order to increase costs and profits for the design-builder, or built with lesser grade products to maximize profits. If time is of the essence, a design and construction contracts can be awarded separately, with bidding taking place on preliminary plans in a not-to-exceed contract in lieu of a single firm design-build contract.

Planning and scheduling

Project management methodology:

  • Work breakdown structure
  • Project network of activities
    • Critical path method (CPM)
    • Resource management
    • Resource leveling

Architecture–Engineer

  • Work inspection
  • Change orders
  • Review payments
  • Materials and samples
  • Shop drawings
  • 3d image

Agency CM

Construction Cost Management is a fee-based service in which the Construction Manager (C.M) is responsible exclusively to the owner and acts in the owner's interests at every stage of the project. The construction manager offers advice, uncolored by any conflicting interest, 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 possible benefit to owners from Construction Management. 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 to select the design team as well as the construction team and manage the design preventing scope creep, helping the owner stay within a pre-determined budget by performing Value Engineering, Cost/Benefit Analysis and Best Value Comparisons.

CM at-risk

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), in most cases. The construction manager acts as consultant to the owner in the development and design phases, (often referred to as "Preconstruction Services"), but as the equivalent of a general contractor during the construction phase. When a construction manager is bound to a GMP, the most fundamental character of the relationship is changed. In addition to acting in the owner's interest, the construction manager must manage and control construction costs to not exceed the GMP, which would be a financial hit to the CM company.

CM at risk is a global term referring to a business relationship of Construction contractor, Owner and Architect / 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 somewhat comparable to a "Low Bid" contract, but with a number of adjustments in responsibilities required by the CM. The following are some of the potential benefits of a CM At Risk arrangement:

Budget management: Before design of a project is completed ( 6 months to 1½ years 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 overall scope of the project. In balancing the costs, schedule, quality and scope of the project, decisions can be made to modify the design concept instead of having to spend a considerable amount of time, effort and money re-designing and/or modifying completed construction documents. For instance, if the Owner decides to spend more money or obtain more funding for the project, adjustments can be made to the project more cost-effectively without having to complete construction documents as a predecessor to pricing. To manage the budget before design is done, construction crews are mobilized, the CM is often spending significant resources each week with onsite management, major items are purchased, etc., etc., is a much more efficient use of everyone's time, effort, Architect / Designer's costs, and the CM's General Conditions costs, AND delivering to the Owner a design within his budget.

Regulation

In the UK the industry is regulated though Construction Design Management regulations, which prevent incidents on construction sites and civil engineering structures once they are completed.

References

Further reading

  • Halpin, Daniel W., Construction Management, Wiley, Third Edition.

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