Contruction Management and Procedures

CONSTRUCTION PROJECT
MANAGEMENT
MANAGEMENT
• Construction management
• Construction management (CM) is a
professional service that uses specialized,
project management techniques to oversee
the planning, design, and construction of a
project, from its beginning to its end. The
purpose of CM is to control a project's time /
delivery, cost and quality—sometimes
referred to as a project management triangle
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• At its most fundamental level, construction
project management handles the planning,
coordination, and execution of a construction
project, whether it’s agricultural, residential,
commercial, institutional, industrial, heavy
civil, or environmental.
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• Construction project management typically
includes complicated tasks that can shift
wildly, depending on the work at hand, and it
requires strong skills in communication, deep
knowledge of the building process, and the
ability to problem-solve. Construction project
management is a complex field, requiring
knowledge in many different areas like
finance, mediation, law, business, and more.
History of Construction Management,
from the Pyramids to Today
• As long as there have been complex building
projects, there have been project managers.
For centuries, however, the person overseeing
the construction of a complex building was
often the architect, which is thought to be the
case in ancient structures like the Great
Pyramids of Egypt and the aqueducts of
Rome.
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• The rules of project management began to
take shape across corporate America around
the time of World War II, and by the 1950s,
they were guiding civil construction projects.
This meant that the phases and tenets of
managing a construction engineering project
were now being applied to a variety of
corporate projects.
MANAGEMENT
• More and more details of managing a
construction project can be done digitally (see
software section below), and that trend is
expected to grow. Mobile-friendly technology
and software are set to play a major role in
the field, as a younger workforce is more
comfortable with the technology, and it will
allow the work to be managed and tracked
from anywhere.
The Role of a Project Manager in
Construction Management
• Construction project managers shoulder the
responsibility of keeping the project moving
according to plan. The goal is to manage the
project so that it finishes on schedule and
within budget, while still meeting building
codes, plans, and specs.
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• A construction project manager may also be
charged with setting the parameters, finances,
and calendar; vetting and hiring
subcontractors and on-site workers;
developing a strategy for potential conflict
resolution; and more.
MANAGEMENT
• The Construction Management Association of
America, a U.S. construction management
certification and advocacy body, says the 120
common responsibilities of a construction
manager fall into these seven categories:
MANAGEMENT
• Project management planning
• Cost management
• Time management
• Quality management
• Contract administration
• Safety management
• Construction management professional practices
(manage the team working on the project, define
each person’s role and responsibilities, etc.)
The Role of a Contractor in
• First up in any construction project is the
design phase, and when that’s finished, the
construction project manager opens the
bidding process to interested contractors. To
qualify for consideration, contractors must be
able to show they can handle public safety;
decision-making, engineering, drafting, human
resources, and time, cost, and quality
management.
MANAGEMENT
• The contractors who meet these guidelines
are then chosen through low-bid selection,
best-value selection, or qualifications-based
selection — all common measures.
A contractor can expect two kinds of
bids:
• Open Bid: Open bids apply to public projects
and are usually advertised. With an open bid,
any contractor can put in an offer.
• Closed Bid: The process for a private project
starts with a closed bid, wherein the owner
invites a select group of contractors to send in
their bids.
MANAGEMENT
• Whether the owner chooses an open or a
closed bid process for the project, the bids will
then come in, and the selection of a
contractor can commence based on a number
of criteria:
MANAGEMENT
• Low-Bid Selection: The bottom line — aka the price —
is the main focus for the project owner. The winning
contractor is the one who submits the lowest price for
the project.
• Qualifications-Based Selection: In this process, the
project owner asks contractors to submit with their
bid a request for qualifications (RFQ), which
summarizes the contractor’s experience, plans for
management, organizational flow, and success in
staying on budget and on schedule. The project owner
then chooses the contractor with the best
qualifications.
MANAGEMENT
• Best-Value Selection: In this approach, the
project owner considers both the bid price
and the contractor’s qualifications to find the
best combination of cost and skill set.
• The next and final step after an owner
chooses a contractor is to negotiate a
payment agreement. Both parties typically
select from four payment models:
MANAGEMENT
• Lump Sum: A lump-sum contract is the most prevalent choice. The project
owner and the contractor come together on the overall cost for the work,
and the owner must pay that amount, regardless of the project’s success
or if the final bill surpasses the initial quoted price.
• Cost-Plus-Fee: As the name suggests, cost-plus-fee includes the total cost
of the project as well as a fixed fee percentage of the overall cost to the
contractor, all of which the owner must pay. This is the most
contractor-friendly arrangement, since it covers all additional costs.
• Guaranteed Maximum Price: With a guaranteed maximum price contract,
the owner and contractor agree on a set price that the total cost and fee
cannot exceed.
• Unit Price: If the two parties can’t agree on the cost ahead of time, they
opt for a unit-price model, in which the owner pays out a specific unit
price throughout each phase of the project.
Business Models for Construction
Projects
• The bidding process is usually consistent no matter the type
of construction project, but you can expect two business
models in the construction industry:
• Design-Bid-Build Contracts: Both popular and prevalent,
design-bid-build contracts allow the owner to choose a
contractor after an architect or engineer completes the
design phase.
• Design-Build Contracts: The opposite of design-bid-build, in
a design-build contract, the design and construction phases
are handled by the same party (referred to as the
design-builder or the design-build contractor). This
approach speeds up the project’s completion since the
design and construction phases can happen simultaneously.
MANAGEMENT
• Conceptual/Programming and Feasibility: This
model uses the final vision of the building as the
starting point to determine needs, goals, and
objectives. Considerations include the building
size, the number of rooms, how the space will be
used, and even who will be using the space. This
information is generally captured in a spreadsheet
listing each room, the critical information about
those spaces, and the approximate square
footage of each area.
MANAGEMENT
• Schematic Design: Schematic designs are
drawings or sketches used to identify spaces,
shapes, and patterns. Not every part of a
construction project can be sketched, of
course, but those that can be are in this type
of design. The drawings note materials, colors,
and textures. These sketches can also capture
floorplans, where structures like elevators will
be placed, and so on.
Project Management Principles and
Process
• After the bidding process is finished, the
construction phase can then start. Although the
stages of a construction project are different than
that of traditional project management, they
follow a similar pattern.
• If they don’t already know them, all construction
project managers should familiarize themselves
with the five phases of project management, as
developed by the Project Management Institute
MANAGEMENT
• 1. Initiation
• Before the project starts, a project manager must
develop and evaluate the business case to
determine if the project is feasible and worth
undertaking. Stakeholders may be asked to do
their due diligence and to conduct feasibility
testing, if needed. When all parties agree to
proceed with the project, the project manager
writes a project charter or project initiation
document (PID), which includes both the business
needs and the business case.
MANAGEMENT
• Planning
• Next, the project team develops a road map
for all involved. This includes the project
management plan (PMP), a formal, approved
document created by the project manager to
guide execution and control, as well as set
baselines for scope, cost, and schedule. You
can also expect to see these documents in the
planning phase:
MANAGEMENT
• Scope statement and scope documentation:
This defines the project’s business need,
benefits, objectives, deliverables, and key
milestones.
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• Work breakdown structure (WBS): This
document breaks down the scope of the
project into visual, manageable chunks.
•
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• Communication plan: This outlines all aspects
of communication, from goals and objectives
to roles to tools and methods. The
communication plan creates a common
framework that everyone can work from to
avoid misunderstandings or conflict.
MANAGEMENT
• . Execution
• Now the work begins. Typically, all parties
hold a kickoff meeting, then the project team
begins the crucial work of assigning resources,
implementing project management plans,
setting up tracking systems, completing tasks,
updating the project schedule, and if
necessary, modifying the project plan.
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• Performance and Monitoring
• The monitoring phase often happens
concurrently with the execution phase. This
phase is necessary to measure progress and
performance and to ensure that items are in
line with the overall project management
plan.
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• Closure
• This final phase marks the project’s
completion. To mark the conclusion, project
managers may hold a post-mortem meeting to
discuss what parts of the project did and
didn’t meet objectives. The project team then
creates a punch list of any lingering tasks,
performs a final budget, and issues a project
report.
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• . Design
• This is the first stage of a construction project,
and once it is completed, it signals the
beginning of the bidding process. In
design-bid-build contracts, the owner chooses
a contractor based on completed designs.
MANAGEMENT
• In this stage, an architect or engineer first
assesses the feasibility of the design based on
regulations and codes of the building, as well
as the number of rooms, the size of the
building, and the amount of space. Then he or
she creates schematic designs or sketches,
researching the type of equipment and
materials needed and their cost.
MANAGEMENT
• . Pre-Construction
• The bidding process is over and the owner has
chosen a contractor. The contractor is then paired
with the project team, including a contract
administrator, project manager, field engineer,
and superintendent. Then the team gets the site
ready for construction. They conduct a site
examination, test soil, and identify any possible
unexpected situations, like environmental
challenges.
MANAGEMENT
• Procurement
• The project team purchases the required equipment,
materials, and labor. In other words, the procurement
stage is when the team buys everything it needs to
complete the project. The complexity of this stage
depends on the size of the project and the company.
Large national construction companies usually have
procurement departments that hire labor and
purchase materials for hundreds of projects at once.
On the other hand, for smaller projects, the
superintendent may buy limited quantities of
materials from local building supplies or hire a local
laborer.
MANAGEMENT
• . Construction
• To kick off the construction phase, the
superintendent will arrange a meeting with the
subcontractors and material vendors to set the
ground rules for working together. Then the team
must get ready to start construction, completing
activities like setting up temporary storage
facilities, securing the site, developing a materials
and handling plan, establishing safety programs,
and more. After that, the team begins
construction.
MANAGEMENT
• Commissioning
• Once construction is completed, the
commissioning stage begins. There are two parts
to the commissioning process. First, the project
team must test the systems and equipment to
make sure everything is working correctly before
turning over the building to the owner. Then the
team must train the owner’s personnel in the
operation and maintenance of the systems in the
new building.
MANAGEMENT
• Owner Occupancy
• When the owner moves into the new building,
the warranty period starts. This ensures that
all the materials, equipment, and building
quality meet the expectations outlined in the
contract. There are two types of warranties:
express warranties (written and included in
the contract) and implied warranties
(established or required by law).
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• Project Closeout
• This final phase ties up any loose ends. The
team formally completes any remaining
contractual obligations to finish the project.
They may create a project punch list of any
tasks that didn’t get accomplished and may
conduct a post-project review, document
lessons learned, archive project documents, or
prepare a project completion report.
Cost, Budget, and Finance in
• Project managers must always think about
money. From estimating budgets before the
project even starts to hiring and paying
contractors, financial management is one of
the most important parts of a successful
project.
MANAGEMENT
• Construction Pricing and Contracting
• There are a number of options when paying
contractors and outlining price in contracts. In the
competitive bidding process, contractors submit
their bid to work on the project. These bids are
either submitted on a lump-sum or unit-price
basis, whichever the owner specifies. A lump-sum
bid refers to the total price of work by the
contractor. Unit-price bidding is used in projects
where the amount of labor and materials are
uncertain.
MANAGEMENT
• instead of inviting competitive bidding, some
private owners choose to award contracts to one
or more selected contractors with negotiated
contracts, which provides more flexibility in
pricing. Negotiated contracts usually require
reimbursement of direct project costs plus the
contractor’s fee determined by one of these
methods: cost plus fixed percentage, cost plus
fixed fee, cost plus variable fee, target estimate,
or guaranteed maximum price or cost.
MANAGEMENT
• . Cost Estimation and Budgeting
• A cost estimation is prepared in order to submit a bid
for a construction project and is used to establish a
budget for the project once it is won. The process
includes determining the cost estimates from building,
unit prices and lump-sum estimates, job sites and
general overhead, bidding procedures, and labor
costs. Cost estimates are sometimes prepared by a
professional, such as a building estimator or a chief
estimator. Even though the project manager may not
be the sole person responsible for cost estimation, it is
still necessary that he or she become familiar with the
process to understand the scope of the project.
• Cost-Control Monitoring
• As the project begins, project managers need to
quickly create a process to monitor project costs.
The sooner the cost-control monitoring phase
begins, the faster that project managers will be
able to identify trouble spots. For example, if an
item is significantly more expensive than the
estimate, the project manager should identify the
reason for the difference and see if that cost
increase affects anything else in the budget.
MANAGEMENT
• Capital Improvement Plan (CIP)
• A Capital Improvement Plan (or Program) is a four- to
10-year plan that identifies capital projects and
equipment purchases, provides schedule, and
identifies options for financing the plan. The plan links
a government entity, a strategic plan, and the entity’s
annual budget. A CIP includes a list of all projects or
equipment to be purchased, the projects ranked in
order of preference, the plan for financing the
projects, schedules for the construction phase of the
project, justification of the project, and explanation of
the expenses.
MANAGEMENT
• Project Accounting
• The project manager and/or the agency’s
accounting department will have to develop the
project budget for the fiscal year, record and
report expenditures, review and pay contractor
invoices, and manage cash flow. From materials to
labor, there are many costs in construction
projects. Costs are either direct (labor, material,
subcontracting, and land) or indirect (indirect
labor, supervision, tools, equipment, supplies,
insurance, and support costs).
MANAGEMENT
• The project team and the accounting
department may need to work closely
together to manage contractor invoices. The
project team reviews invoices to make sure
the work has been properly completed, then
the accounting department ensures that the
invoices are contractually eligible and the
prices are consistent with the contract.
Organizing and Scheduling a
Construction Project
• With RFPs, contracts, invoices, blueprints, and
more, it can be hard to keep track of all the
necessary documents in a construction
project. Because construction projects are so
large and involve complex information,
organization is key to staying on schedule.
Organization Strategies
• There are several streams of information that

need organization and management in any
construction project. These are the most
business-critical:
MANAGEMENT
• Records Management: Record management
controls the distribution, storage, and
retrieval of project records, both hard copies
and electronic, in a safe, secure manner.
Project managers must make sure that all
incoming and outgoing documents are
transmitted through the records management
specialist, who uses software to track the
records (this method will also create a central
library of all project documents and
information).
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• Contract Management: It is important to clearly
define the roles and responsibilities for the
project team members who are managing the
project and the project staff responsible for
managing contracts and documents. The contract
management plan is designed to set expectations
and procedures around this by addressing who
has the authority to direct and approve the
contractors to work, how the contractor’s work is
monitored and reported, how they are paid and
approved, how contracts are modified, which
financial audits are necessary, etc.
MANAGEMENT
• Contract Procurement Planning: Project
managers also have to ensure that procurement
activities fit with the project plan. Some of the
tasks they have to manage include:
• Setting expected contract price
• Creating the scope of work (SOW) for each
contract
• Standardizing procurement documents and any
other necessary documents
• Adding completion dates to contracts that align
with the project schedule
MANAGEMENT
• Commissioning Plan and List: The commissioning
plan and list should be started early in the design
phase and continually updated as the project
progresses. The commissioning plan is designed to
provide direction for the commissioning process
during construction; to resolve issues related to
scheduling, roles, and responsibilities; and to aid
in the reporting, approvals, and coordination. It is
a systematic process to ensure that buildings
perform according to the design and to the
owner’s operational requirements.
MANAGEMENT
• Project Control Process: The project control
process tracks and manages the scope, cost,
and schedule of a construction project. The
goals of this process are to establish a
baseline, track performance against the
baseline, forecast performance at completion
and compare to the baseline, and identify
changes and monitor the effects to the
baseline.
MANAGEMENT
• Project Requirement Definition: Also known
as the statement of work, this document
details the project deliverables. In the project
requirement definition (PRD), the project
manager explains the scope of work and what
the project will accomplish. It helps
stakeholders, team members, and external
parties all understand the goal of the project
and acts as a record of initial expectations.
MANAGEMENT
• As-Built Drawings: Also known as record
drawings, these are edited drawings
submitted by a contractor at the end of a
project. They reflect all the changes made in
the working drawings during the construction
process and show the dimensions, geometry,
and location of all elements included in the
contract. As-built drawings provide a quick
visual into the existing design and capture
deviations from the original documents.
MANAGEMENT
• Daily Documentation: Keeping diaries, logs,
and daily reports of project activities acts as a
reference guide after the work is completed
and can mitigate any damages. This kind of
documentation can show how questions were
answered, how problems were solved, and
tracks any unusual conditions on a certain
day. By keeping these daily logs, you are
leaving a paper trail throughout the whole
project in case anything goes awry later on.
• And finally, the working drawings are created.
These are the project’s final specifications and
illustrations that builders use for construction
and that contractors add to their bid.
Scheduling Strategies
• Organizing your documents helps you

categorize and prioritize important project
information, and once you have everything
stored in a central location, you can build out
your project schedule.
• A well-defined schedule provides a structured
approach to planning, identifies problems
before they arise, forecasts cash flows, and
assesses resource requirements.
MANAGEMENT
• Gantt Charts: A Gantt chart is the easiest way
to create a construction schedule. It lets you
visualize your project timeline by transforming
task names, dates, durations, and end dates
into cascading horizontal bar charts. Learn
more about creating and using Gantt charts in
Smartsheet.
MANAGEMENT
• Critical Path Scheduling: The most widely used
scheduling technique is the critical path method.
This method calculates the minimum project
completion time and the start and end dates for
all project tasks. It identifies the critical tasks that,
if delayed, will delay your entire project. The
critical path method helps you reduce timelines,
manage resources, and compare planned with
actual. To learn more, read our Ultimate Guide to
the Critical Path Method.
• Line of Balance: This scheduling technique is
best suited for repetitive work and is often
employed in road construction. It is a
management control process for collecting,
measuring, and presenting facts relating to
time, all measured against a specific plan.
With a Line of Balance schedule, you must
allocate resources for each step, so you can
make sure the next step is not delayed.
• Q Scheduling: This form of construction
scheduling addresses the sequence of activities,
relationships between tasks, and the total cost of
finishing the project. It includes the overall
construction site and prevents two competing
activities from happening at the same time at the
same location. While this technique is the closest
to reality, it requires special software and can take
more effort from the project manager to evaluate
cost analyses for the different schedule
alternatives generated.
Problems, Issues, and Legal Matters in
a Construction Project
• Construction projects are always changing,
and the constant level of uncertainty can
often bring conflict to project teams.
Construction project managers are often
tasked with resolving disputes, identifying and
mitigating risks, and understanding legal
ramifications.
• Here’s what construction project managers
should know:
How to Resolve Disputes
• Conflicts will inevitably arise in any project. It’s

the project manager’s job to resolve the
disputes, so the team can stay productive and
work well together. Possible conflicts in a
project could include poor communication,
lack of clarity, conflicts of interest, limited
resources, or power struggles. While every
conflict is different, there are several
resolution strategies that you may employ:
• Mediation: A third-party mediator will be
hired to resolve the disputes between the two
parties. This strategy is the cheapest and least
time-consuming.
• Mini-Trial: A mini-trial is held in an informal
setting with an advisor or an attorney who
must be paid. The agreement is nonbinding
and can be broken. A mini-trial takes more
time and more money than mediation.
MANAGEMENT
• Arbitration: Arbitration is the most expensive
and time-consuming way to resolve a conflict.
Each party is represented by an attorney while
witnesses and evidence are presented. Then,
the arbitrator makes a ruling and his final
decision is a binding agreement.
How to Create a Risk Management
Plan
• By focusing on prevention, project managers
can spend less time dealing with spontaneous
problems and more time on reducing their
impact. A risk management plan is used to
manage all project risks, defines the roles of
project staff in risk management, and
identifies potential risks and categorizes them
in terms of probability and impact.
Understand Legal Principles
• When project managers have to negotiate

contracts, deal with jurisdictions’ licensing
requirements, purchase insurance, and
manage job site safety, an understanding of
legal principles can save time and money.
There are several areas of liability in
construction management.
MANAGEMENT
• There are several areas of liability in construction
management. There could be a claim for failure to
detect defective work if a bid exceeds estimates, if
there is extended overhead, or if the project is
delayed. Most professional liability policies don’t
cover any aspect of faulty workmanship (like
fabrication or installation) or economic risks, so
project managers have to make sure they have
the appropriate coverage and are doing
everything they can to avoid liabilities and claims.
How to Prepare a Quality Control Plan
• A quality control plan ensures that the
building has reached a specific standard.
Quality control is the last step a project goes
through before it’s delivered to the owner,
and it consists of a series of systems and
procedures to make sure it meets the highest
standards.
MANAGEMENT
• Project managers will have to evaluate how
to test quality, create a step-by-step process
for auditing the project, and revise and review
the plan to find new problem areas. They will
also have to be knowledgeable in safety
management and codes, building codes, and
compliance codes, then include these aspects
in the plan.

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CONSTRUCTION PROJECT

• There are several streams of information that

• Organizing your documents helps you

• Conflicts will inevitably arise in any project. It’s

• When project managers have to negotiate

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