Construction Project Management

Construction Project Management

Lesson One: Introduction to Construction Project Management and Controls. Lesson Two: Becoming a Project Superintendent.

Lesson Three: Understanding the Project Manager's Role in Client Relations. Lesson Four: The Project Team and Delivery Systems.

Lesson Five: Commercial Project Preparation and Reviewing Construction Documents. Lesson Six: Residential Project Preparation.

Lesson Seven: Residential Cost Controls. Lesson Eight: Commercial Cost Controls.

Lesson 8 Subway Profit Projections and Job Cost Model.xls

Lesson Nine: Commercial Submittals, Samples and Shop Drawings. Lesson Ten: Record Keeping at the Jobsite.

Lesson Eleven: Jobsite Layout and Productivity. Lesson Twelve: Computerized Project Management.

Lesson Thirteen: Partnering, Meetings, Negotiating and Arbitration. Lesson Fourteen: Labor Relations and Productivity.

Lesson Fifteen: Subcontracting and Purchasing.

Lesson Sixteen: Residential Quality Control, Inspections and Checklists. Lesson Seventeen: Commercial Quality Control and Testing.

Lesson Eighteen: Contract Changes and Claims. Lesson Nineteen: Contract Progress Payments. Lesson Twenty: Project Closeout.

Assignments

Assignment One Playhouse Example.

Assignment Two: The Super Bridge Analysis.

Assignment Three: Carlisle, PA Construction Project Budget and Job Cost Model. Assignment Four: Prolog: Setting Up A Project.

Assignment Five: Prolog: Entering Contracts, Submittals, RFI’s and Daily Reports. Assignment Six: Prolog: Practicing in Prolog.

Lesson 1: Introduction to Construction Project Management and

Controls

Introduction:

Why Construction Project Management? There is probably no other discipline that is more

difficult than construction project management. The general goal seems simple enough. Build a project on-time, within budget, with the stated quality standards and in a safe environment. Easy right? Wrong! Research shows that less than 20% of most construction projects meet these four requirements. Is there any doubt why contractors are often held in the same esteem as used car salesman? Construction project management is known for continual problems. Contractors have a continual record of poor performance.

Over the last 20 years construction project management has developed in knowledge, management skills and increased performance and quality. Today there are many excellent contractors that perform well in time, budget, quality and safety. So how do they do it? This course focuses on the best practices of successful project managers.

So what’s in it for you? Yours is the opportunity to learn and apply these best practices in a learning setting so that when you enter the workplace you can be one of those in the minority that can perform admirably! The purpose of this lesson is to get you excited about project

management and the powerful knowledge and skills that you will learn to help you be successful. The other purpose is to introduce you to the course and how the course will be managed using Blackboard, an on-line course management program.

Lesson Objectives:

At the end of this lesson you should:

1. Learn how the course will be managed and what the course expectations are. 2. Know what the definition of a project is.

3. Be able to describe how resources are generally spent on a project.

4. Be able to describe the Construction Keystone Model and Project Management High Leverage Activities.

5. Be able to describe the attitude of a project manager.

At the end of this lesson you should be able to:

1. Outline the scope of any project.

2. Create an “S” curve and baseline variance report. 3. Create a construction baseline plan.

How to Proceed:

(1) Read and review Part 1: Course Syllabus.

(2) Read and review Part 2: Introduction to the Basic Concepts of Project Management. (3) Answer the self-check questions to evaluate your readiness to take quiz 1.

(4) When you feel that you are ready, Take quiz 1. (5) Read and complete assignment 1.

Discussion Materials:

FAQ 1:What will I learn? There is big difference between working on a project and providing

management and leadership for a project. You will learn specific management skills that will enable you to be successful in managing any construction project. The principles taught will provide both a residential and commercial construction perspective. The course is divided into 20 lessons. The lessons are:

Lesson 1: Introduction to Construction Project Management and Controls Lesson 2: Becoming a Project Superintendent

Lesson 3: Understanding the Project Managers Role in Client Relations Lesson 4: The Project Team and Delivery Systems (Commercial)

Lesson 5: Commercial Project Preparation and Reviewing Construction Documents Lesson 6: Residential Project Preparation (Residential)

Lesson 7: Residential Cost Controls Lesson 8: Commercial Cost Controls

Lesson 9: Commercial Submittals, Samples and Shop Drawings Lesson 10: Record Keeping at the Jobsite (Commercial)

Lesson 11: Jobsite Layout and Productivity (Commercial) Lesson 12: Computerized Project Management (Commercial)

Lesson 13: Partnering, Meetings, Negotiations and Arbitration (Commercial) Lesson 14: Labor Relations and Productivity (Commercial)

Lesson 15: Subcontracting and Purchasing (Commercial)

Lesson 16: Residential Quality Control, Inspections and Checklists Lesson 17: Commercial Quality Control and Testing

Lesson 18: Contract Changes and Claims (Commercial) Lesson 19: Contract Progress Payments (Commercial) Lesson 20: Project Closeout (Commercial)

FAQ 2: What is the format for each lesson?

Introduction:

Each lesson will provide an introduction to the general concepts and principles to be learned. Lesson Objectives:

Next, each lesson objective will explain what you will learn and how to apply the knowledge. The best way to review each concept is to ask the question, “At the end of this lesson concept I should know __________________ and I should be able to do ______________.

How to Proceed:

You will then be given instructions on how to proceed through the lesson. The instructions may include reading text materials, reviewing a case study or solving a practice problem from the discussion materials.

Discussion Materials:

This area will provide additional direction and guidance about understanding certain concepts. This area will also provide examples that will better explain concepts from the text materials.

Self-Check Questions:

Sample quiz questions with answers will help you assess your readiness to take the lesson quiz.

This will be a ten-question quiz. The questions will be multiple choice or true/false. The questions will test lesson vocabulary, definitions and applications of concepts and principles.

Assignments:

Six assignments will be given. The assignments will be application oriented so that you may practice and develop greater skill in certain areas. The assignments will be mostly case study problem solving.

FAQ 3: How will I be tested? After each lesson you will have some sample, self-check quiz

questions that will help you determine if you are prepared to take the lesson quiz. There will be a ten-question quiz at the end of each lesson. The questions will be multiple choice or true/false. The questions will test lesson vocabulary definitions and applications of concepts and principles.

All quizzes and exams are closed book. No quizzes or exams made be copied or printed out from the computer.

FAQ 4: How will quizzes, assignments and exams be graded? Grading will take place as

follows:

Quizzes 20 x 10 points = 200 points 27% Assignments 6 x 25 points = 150 points 20% Exams 2 x 200 points = 400 points 53%

Total 750 Points A = 712 and up 95% A- = 675 to 720 90% B+ = 652 to 674 87% B = 630 to 651 84% B- = 600 to 629 80% C+ = 571 to 599 77% C = 555 to 570 74% C- = 525 to 554 70% D+ = 502 to 524 67% D = 480 to 501 64% D- = 450 to 479 60% E = 449 or below

FAQ 5: What is the schedule and when do we meet? This course offers great flexibility

because there are no scheduled classes. The most important schedule is to watch and complete assignments, quizzes and exams on or before the due dates. There may be special occasions when help sessions are held. Watch for these announcements on Blackboard or through email.

FAQ 6: When are lessons, quizzes and assignments due? Refer to the Announcements and

Course Information in Blackboard.

FAQ 7: What happens if I turn quizzes and assignments in late? You can not turn quizzes in

late because they automatically turn of on the ending date and time. Quizzes can not be made-up. Construction is a time sensitive business. All assignments must be turned in on time. Late assignments will receive points no greater than a 50% score of total points. Special arrangements may be made if it is cleared by the instructor before the due date. This must be done by email.

FAQ 8: What materials will I study? Two texts books will be used for the course. They are

Construction Jobsite Management, 1998, William R. Mincks, Hal Johnston, Delmar Publishers; Basic Construction Management, The Superintendent’s Job, 4th _{edition, 1999, Leon Rogers,}

Home Builder Press. Both books are available at the BYU Bookstore. All other materials will be available on-line through Blackboard.

FAQ 9: How do I access Blackboard? Blackboard and CM 415 can be accessed through route

Y. Once in route Y go to Blackboard courses at the bottom of the page. Click on Blackboard courses. Your login name will be your route Y log in name. Your password will be your last four digits of your student number (social security number).

FAQ 10: What is Blackboard and how do I use it? Blackboard allows you, the instructor and

other students to communicate with one another, share information and learn together. Explore the 11 buttons on the left side of the screen. If you select the help button at the top of the screen you can go to the student manual and other FAQ’s.

FAQ 11: How do I get help? It is preferred that you use email to receive help. You can locate

the instructor, teaching assistants and students in the class through the communications button of Blackboard. Office hours will also be posted.

FAQ 12: How much time should this course take each week? Each lesson and quiz may take

between 2 to 3 hours depending on the student. Each assignment will take between 3 to 5 hours to complete, once again depending on the student. You will be given a 2hour limit for each exam.

Part 2: Introduction to the Basic Concepts of Project Management

2.1 Basic Concepts of Project Management

Read and study the following slides.

A project is an endeavor to accomplish a specific objective through a unique set of interrelated tasks and the effective utilization of resources.

Attributes of a Project

A project has a well defined objective A project is carried out through a series of interdependent tasks

A project utilizes various resources A project has a specific time frame A project may be a unique or one-time endeavor

A project has a customer

A project involves a degree of uncertainty

Identifying the Scope of a Project

What is the project objective?

What are the series of interdependent tasks? What are the resources needed for the project?

What is the project specific time frame? Is the project a unique or one-time endeavor?

Who is the project customer?

What degree of uncertainty does the project involve?

Let’s suppose that my children wanted for me to build them a playhouse. We would talk about the size and style and come up with a basic design. So I begin to do some planning.

I answer the first question: What is my objective? It is to have a playhouse that my children and grandchildren can enjoy for many years to come.

What are the series of interdependent tasks? I determine that there are 17 tasks. They are:

1. Design/Specifications/Estimate 2. Supervision 3. Permit 4. Excavate/Concrete 5. Floor system 6. Wall system 7. Roof system

8. Shingles 9. Door/Windows 10. Electrical 11. Siding/Soffit/Fascia 12. Insulation 13. Drywall 14. Finish Carpentry 15. Paint 16. Floor Coverings 17. Special Furnishings

What are the resources needed for the project? This is going to take time and money. The money

will be spent on materials, sub contractors and the building permit. I will pretend that I will pay myself $20 per hour and also charge a 15% overhead and profit for the project. There is also a knowledge and skill resource that is needed in order to build the playhouse. After some planning it is determined that the project will cost $2,553, the project will take 21 to 30 days and I will have to spent 48 hours of direct labor on the project. How did I come up with these numbers? See the estimate and the cost loaded schedule in Lesson 1, Playhouse Baseline Project Plan found in Blackboard.

What is the project specific time frame? Luckily there is no absolute time frame but given the

schedule and each activity planned durations totaling 21 days, It may be safe to say that it could be completed in 30 days. Once again see the cost loaded schedule in Lesson 1, Playhouse Baseline Project Plan found in Blackboard.

Is this project a unique or one-time endeavor? It definitely is a one-time endeavor. The learning

curve will be high. Productivity will be low because there are no major repeatable activities.

Who is the project customer? Even though I would like to think that it is I it really is my children

and grandchildren. This means that I should listen and be more responsive to their needs.

What degree of uncertainty does the project involve? Well, I have never done a project like this

before. (Actually I have but for learning purposes let’s pretend.) I have general pricing but material prices and sub contractor pricing could change when I actually go to purchase the materials and service. Something may come up and I may not have the time I expected to do the labor. I have not yet checked with the city about the building permit nor have I check any real estate easements on the property. I am assuming that there will be no problems. My customer (children) also may change their minds as I start building. (It may be a change order!) So there definitely is some risk and uncertainty even with this simple project.

Project Life Cycle

Notice that in the Project Life Cycle slide that almost all projects spend the greatest resources at the end of the project. If a project manager can flatten the line out more projects typically are more successful.

Cumulative Budgeted Cost Curve

The above is a baseline “S” curve. Baseline means the initial plan for the project. An “S” curve is basically is a cost loaded schedule. This slide represents the weeks plan cost (Y axis) against the planned time (x axis). That intersection point creates the “S” curve. Most projects look like an “S” or some call it a banana curve. This is all nice and good but how do you use it? Once your baseline “S” curve is established, then you begin to measure the variance from your plan to the actual. An example is that the actual is below the line then you are spending less than planned. If it is above the plan line you are spending more than planned in relationship to the schedule. An “S” curve only works well if you have real time accurate information to feed into the variance.

Consider the following slide about developing a baseline construction plan. A baseline plan provides a starting place by which to measure variances. This process often referred to as “eating the elephant” breaks down the project into workable pieces that can be identified and measured for compliance to the plan.

Practical Application of Creating a

Baseline Project Plan

Step 1: Review drawings, specifications and contract for clarity and completeness.

Step 2: Divide project into work groups and packages for estimating and scheduling, do quantity takeoffs, create detail sheets that are easy to read and track number of units, unit costs, and estimated duration of activity.

Step 3: Complete estimate rollup sheet that summarizes work package activities, activity duration, cost estimate and OH/P. Step 4: Create a schedule (network diagram) from step 3, rollup sheet.

Step 5: Create a project baseline“S Curve” to track actual performance to the plan and create a variance report.

2.2 The Construction Keystone Model

Project management is all about whole systems thinking. Just as it takes a whole tree to grow one apple it takes a whole system to build one building. Consider the 14 elements in the Construction Keystone Model. The model shows that leadership is keystone that pulls all the elements of the project delivery system together. Without proper leadership the delivery of projects breaks down and problems occur. Is one element more important than another? No! Any single element can have a dramatic impact on any other elements and the overall delivery of the project.

Marketing & Sales Design and Estimating Contract Administration Leadership Human Resources Accounting Project Management Technology, TQM Work Processes and Procedures Suppliers, Sub Contractors, Business Partners, Other Stakeholders Skilled Labor Market Knowledge

Innovation Ethics

Construction Keystone Model Client

A few questions to think about:

How does the right side of the arch differ from the left side? How could innovation affect project delivery?

Why would a construction company need to have market knowledge? Why would the client’s experience be in the center of the arch?

Project Management High Leverage Activities

I have found that successful project managers share 10 common high leverage activities. Carefully study the following three slides.

Project Management High

Leverage Activities

Use TQM (Total Quality Management) Tools to do their work right the first time

Innovative, question architects and engineers, provide value engineering ideas Company has a shared vision, all employees and subs are on the same page

Project Management High

Leverage Activities

Communicate clearly and negotiate well Process paperwork with exactness and are proactive

Manage the schedule well, don’t miss milestone dates Strong advocates of safety

Project Management High

Leverage Activities

Good balance of being technologists (good construction skills) and sound business people Excellent problem solvers

Keep up with

technology and use it to their advantage

From your experience, what do you think are other high leverage activities that help project managers be successful?

2.3 Attitude of a Successful Project Manager

The following story best describes the attitude of problem solving that every project manager should have.

The Go-Getter

In 1921 Peter B. Kyne wrote The Go-Getter, a Story That Tells You How to Be One. This book tells how Mr. Ricks, the owner of a lumber and logging company, was having a problem with his Shanghai office. His supervisor's explanation was that he was surrounded by men who were too young for responsibility. In addition, three managers had "gone rotten.” The company would be in trouble if things persisted as they were. About this time a crippled veteran by the name of William E. Peck requested an interview for employment.

"Please give me a job. I don't care a hoot what it is, provided I can do it. If I can do it, I will do it better than it has ever been done before. If I can't do it, I will quit and save you the embarrassment of firing me."

The old man was impressed and, going over the heads of all the executives and

supervisors, hired William E. Peck. Bill was warned to produce and not get out of line. "The first time you tip a foul, you'll be warned. The second time, you'll get a month lay-off to think about it. The third time you will be out for keeps."

Peck was given the task of selling a lot of undesirable lumber that the company was stuck with. He was happy. He said, "I can sell anything at a fair price." He hit the ball hard. For two months they saw nothing of him. He sold several boxcar loads of skunk spruce, siding, shingles, Douglas fir, and redwood. He sent orders back to the office almost daily. He sold five new accounts and increased sales dramatically. So impressed was the owner that he thought Bill might be a good man to head up the Shanghai office. But, before a final decision, Bill would have to go through the "test."

The "test" was to send Bill on an errand to obtain a very expensive blue vase which had been described to him in detail. Bill was told to obtain it and deliver it to a stateroom in car seven on the train for Santa Barbara so that Mr. Ricks could take it to his wife for their anniversary. Bill was told the approximate location of the neighborhood-which street, which

store, and the window where it could be seen. It was Sunday and after 3:00 p.m. when Bill went to find the vase. He went to the area where the vase had been seen but he searched in vain, street after street -two blocks of additional searching in all four directions, four more blocks before he finally discovered the object of his search. He kicked the door, making an infernal racket, but no one responded. He backed away and read the sign over the door, B. Cohen's Art Shop.

He limped to a hotel, picked up the phone book, and found nineteen B. Cohens. He searched for the art dealer in vain and then dialed all nineteen numbers. He emerged from the phone booth wringing wet from perspiration. It was 6:00 P.M., and his bad leg was starting to give out on him. Then he had a flash of thought, Could the name have been spelled differently? Was it Cohen, Cohan, Cohn, Kohn, or Coen? He went back to the art shop: It was spelled Cohn's Art Shop. He went back to the phone booth and began calling all the Cohns. On the sixth call he was lucky and got the right B. Cohn. The cook who answered the phone said that Mr. Cohn was dining at the house of a Mr. Simons in Mill Valley. There were three Mr. Simons, and Bill called all of them before connecting with the right one. Yes, Mr. Cohn was there, but who wished to speak to him? Mr. Heck? Mr. Lake? A silence followed, then the maid returned, "Mr. Cohn doesn't know any Mr. Lakes and wants to know the nature of the business.

"Tell him Mr. Peck wants to speak to him regarding a matter of grave importance." After a frustrating dialogue, Mr. Cohn came to the phone. Bill told him that he had to have the vase by 7:45 p.m. that night and he needed Mr. Cohn to come back across the Bay, open his store, and sell him the vase.

Bill was told to contact Mr. Joost. Again, Bill encountered the same kind of run-around as he tried to find Joost at one of several country clubs. He could not find Joost.

He borrowed a hammer then hailed a taxi. He was going back to the art store to break the window. But when he reached the shop, there was a policeman standing in front of the store. He left and came back and noticed the sign over the store read B. Cohen's Art Store. He sat down on a fire hydrant and cursed with rage. His weak leg hurt, the stump on his left arm developed a feeling that his missing hand itched. He took the taxi back to the hotel. Hope springing eternally in his breast, he called Mr. Joost, who then after their conversation had to verify with Mr. Cohn the entire story. If Mr. Kek would just wait at the art store, he would come over if the story was accurate.

At 9:15 p.m. Herman Joost arrived and brought the policeman along with him for protection, just in case. He opened and retrieved lovingly the blue vase; the cost was two thousand dollars. Bill had ten dollars, and Mr. Joost refused a check. Bill called Mr. Skinner from the company and asked to have two thousand dollars sent down. There was a time lock on the safe and no way to get the money. He tried Mr. Ricks's residence to see if he had the money. He had left for Santa Barbara. He tried everything. Finally he went back to his hotel, got his diamond ring with sapphires set in platinum. It was worth about twenty-five hundred dollars. He left it until he could bring the money.

It was too late to catch the train that left at 8:45 p.m. He went to the flying field at Mariner. He got the address of the pilot and awakened him at midnight. They headed south in the moonlight with the vase. An hour and a half later they landed in a field of stubble in the Salinas Valley. He limped to the railroad track; and when the train came he made a torch ' stood between the tracks, and flagged down the train. The train slid to a halt, and the brakeman railed on Bill Peck violently. Bill climbed on board and said he would purchase a ticket. The

brakeman said, "That's right, take advantage of your half-portion arm and abuse me. Are you looking for that little old man with the Henry Clay collar and the white muttonchop whiskers?"

"I certainly am."

"Well, he was looking for you just before we left San Francisco. He asked me if I had seen a one-armed man with a box under his good arm. I'll lead you to him."

A prolonged ringing at Mr. Ricks's stateroom door brought the old gentleman to the entrance in his nightshirt.

"Very sorry to have to disturb you, Mr. Ricks," said Bill, "but the fact is there were so many Cohens and Cohns and Cohans and it was such a job to dig up two thousand dollars that I failed to connect with you at 7:45 last night as ordered. It was absolutely impossible for me to accomplish this task in the time limit set; but I was resolved that you would not be

disappointed. Here is the vase. The shop wasn't within four blocks of where you thought it was, sir; but I'm sure I found the right vase. It ought to be. It cost enough and was hard enough to get. So it should be a precious gift for your wife or anyone else."

Mr. Ricks stared at Bill Peck as if he were looking at a spook. "By all that's wonderful!" he murmured. "We changed the sign on you, we stacked the Cohens on you, and we set a policeman to guard the shop to keep you from breaking the window. We made you dig up two thousand dollars on a Sunday night in a town where you are practically unknown; and, while you missed the 8:00 p.m. train, you overtook it at 2:00 a.m. in the morning and delivered the vase. Come in and rest your poor old game leg, Bill. Brakeman, I am much obliged to you."

Bill Peck entered and slumped wearily down on the settee.

"So it was a plan?" he croaked, and his voice trembled with rage. "Well, sir, you're an old man, and you've been good to me; so I do not begrudge you your little joke. But, Mr. Ricks, I can't stand things like I could before I was crippled in the war. My leg hurts and my stump hurts and my heart hurts."

He paused, choking, and the tears of impotent rage filled his eyes.

"You shouldn't treat me that way, sir," he complained presently. "I've been trained not to question orders, even when they seem utterly foolish to me. I've been trained to obey them -on time, if possible; but, if impossible, to obey them anyhow. I've been taught loyalty to my chief, and I'm sorry my chief found it necessary to make a buffoon of me. I haven't had a very good time the past three years, and you can pa-pa-pass your skunk wood and larch rustic and short, odd-length stock to some slacker."

At this point Mr. Ricks apologized profusely and let Bill know that he had passed a test that only one other out of fifteen had passed and that the reward was a very highly paid position as the manager of the Shanghai office. By the time Mr. Ricks was through with his apology, Bill Peck had forgotten his rage; but the tears of his recent fury still glistened in his bold blue eyes. "Thank you, sir. I forgive you, and I'll make good in Shanghai."

"I know you will, Bill. Now tell me, son, weren't you tempted to quit when you discovered the almost insuperable obstacles I had placed in your way?"

"Yes, sir, I was. I wanted to commit suicide before I had finished telephoning all the Cohens in the world. And when I started on the Cohns, well, it was this way, sir. I just couldn't quit because that would have been disloyal to a man I once knew."

Who was he?" Cappy Ricks demanded, and there was awe in his voice.

"He was my brigadier, and he had a brigade motto: It shall be done. When the divisional commander called him and told him to move forward with his brigade and occupy certain territory, our brigadier would say: 'Very well, sir. It shall be done.' If any officer in his brigade showed signs of shirking his job be-cause it appeared impossible, the brigadier would just look at him once. And then that officer would remember the motto and go and do his job or die trying.

"The brigadier once sent for me and ordered me to go out and get a certain German sniper. I'd been pretty lucky-some days. He opened a map and said to me: 'Here's about where he holes up. Go get him, Private Peck.'

"Well, Mr. Ricks, I snapped to it and gave him a rifle salute and said, 'Sir, it shall be done. ‘I’ll never forget the look that man gave me.

"He came down to the hospital to see me after I'd walked into one of the dustricair 88s. I knew my left wing was a total loss, and I suspected my left leg was about to leave me, and I was downhearted and wanted to die.

"He came and bucked me up. He said, 'Why, Private Peck, you aren't half dead. In civilian life you're going to be worth a half a dozen live ones, aren't you?' But I was pretty far

gone, and I told him I didn't believe it; so he gave me a hard look and said, 'Private Peck will do his utmost to recover, and as a starter he will smile.'

"Of course, putting it in the form of an order, I had to give him the usual reply as I grinned and said, 'Sir, it shall be done.'

"He was quite a man, sir, and his brigade had a soul-his soul."

As William Peck told Mr. Ricks the name of the brigadier, Ricks was visibly startled and said, "The brigadier was a candidate for an important job in my employ, and I gave him the test of the blue vase." Then he explained how the brigadier succeeded in getting the vase.

Kyne, Peter,: The Go-Getter, Story That Tells You How to Be One. (1921), out of print. Retold by Featherstone, Vaughn J.: Commitment, 1982, Bookcraft, Salt Lake City, Utah, p.3-8.

Self-Check Questions Lesson 1:

1. What percentage of construction projects are finished on time, in budget, within quality standards and in a safe environment?

a. 90%

b. 75%

c. 50%

d. 20%

2. This course is directed to just commercial construction.

a. True

b. False

3. Managing risk on a project deals primarily with: a. business partners

b. stealing which is the main point of the Go-Getter story c. dealing with uncertainty

d. managing an “S” curve

4. The Construction Keystone Model demonstrates: a. whole systems thinking

b. that clients are the center of our business c. that leadership drives the whole system d. all the above

5. According to high leverage activities, good business skills are more important than construction skills.

a. True

b. False

1-d, 2-b, 3-c, 4-d, 5-b

Lesson 1 Quiz:

See Blackboard, Assignments, Quizzes.

Assignment 1: Preparing a Project Baseline Plan

Lesson 2: Becoming a Project Superintendent

Introduction:

What does a project superintendent really do? The project superintendent is the construction company’s agent and field representative. Generally all negotiations, agreements and contracts that the superintendent enters into become legal and binding. Being a project superintendent is like having control of your own company committed to the task of building a building. You are it. You are the general on the front line. You either make or break the project. Being a project superintendent is tough business.

This lesson provides a residential and commercial construction perspective. Most importantly it offers what project superintendents do to be successful.

Lesson Objectives:

At the end of this lesson you should:

1. Be able to describe a superintendent’s basic duties.

2. Know the difference between the superintendent as a leader and a manager. 3. Be able to describe how a superintendent plans, organizes, directs and controls a

project.

4. Understand what a typical day is like for a superintendent.

5. Understand four leadership styles of being a project superintendent.

How to Proceed:

1. Read Basic Construction Management, Chapter 1, pg. 11-28; and Construction Jobsite Management, pg. 179-181.

2. Read the Ed Johnson Interview

3. Answer the self-check questions to evaluate your readiness to take quiz 2. 4. When you feel that you are ready, take quiz 2.

Discussion Materials:

The Ed Johnson Interview

Ed Johnson is a superintendent for a $30 million dollar commercial construction company. Ed started out as a carpenter laborer in his late teens. He is now 35. He is well respected in the company for being a no-nonsense guy who gets the job done. He has grown through the ranks from being a foreman and now as a superintendent. He typically is entrusted with project’s that are about $2 to $5 million. He is currently the superintendent for a new car dealership, which is

about $4 million. Some students had a chance to interview Ed about what makes him successful. Here is how the interview went:

Students: Ed, what do you think has made you successful?

Ed: Well it all depends. I guess that I am very organized and I always live about three weeks into the future.

Students: What do you mean ‘three weeks in the future’?

Ed: I’m sure that all of you have heard of a three-week rolling schedule. After I have prepared to start a new project, and made sure that we are all ready to go, I always look at what exactly has to happen and how I am going to do it three weeks in advance. At three weeks I still have time to make adjustments and changes or solve problems. If I start doing that one or two weeks in advance it is too late.

Students: How do you organize and motivate your employees and your sub contractors?

Ed: I am very direct with my subs right up front. I do not leave anything to chance or assume that I think I know what they are doing on a certain day. I review the contract with the subs very carefully including:

1. insurance requirements,

2. their safety plan and our safety plan,

3. the scope of the work as detailed in the drawings and specifications, 4. their licensing requirements,

5. what meetings they are required to attend,

6. the project schedule and how they fit into the schedule, 7. help them identify how they can best work with other subs, 8. each sub has a quality control checklist,

9. how we communicate on the jobsite, 10. how we solve problems,

11. how we treat each other and the other subs.

Their work is my work. I am like the conductor of an orchestra. A particular subcontractor might be the trombone section. They have got to know their part and when to come in at certain parts of the music. They may have a solo (like the key critical path item on the schedule). So the bottom line is that I make sure that three weeks out they are ready to perform.

I try real hard to be a support and help them solve their won problems but I still carry a big stick. I never let them give me their problems. They are still responsible. The best thing that we have done as a company is to develop long-term relationships with our subs. That means that we are working with people who we know from previous jobs. That really helps when you can work with those that you are familiar with and you know how to work together.

I think that when subs perform as planned then they are happy and making money. They also know that as a GC we can give them future work. I try to be a straight shooter. When they mess up I tell them, but when they perform well I praise them also. Every sub has their own

personality. I will try to do those things that give them some kind of reward that is not monetary. Such as recognizing them in a meeting in front of key people on a project for work well done.

Students: What about your own employees?

Ed: Sometimes I think that we set our employees up to fail. We don’t properly prepare them to succeed. I learned long ago that there are six critical items that I must give to (or in other words support) employees to be successful. They are:

1. Clear definition of what it is we want them to do. Including the necessary drawings and specifications to perform the task.

2. From the baseline plan and estimate, how many people it should take to do the task and how long it should take. Their input into the work is very important, so I will always review the task with the crew foreman first.

3. Make sure that all necessary materials are on site to perform the work. 4. Make sure that all necessary equipment is on site to perform the work.

5. Make sure that all safety training and equipment is in place before the work begins. 6. Ensure that proper quality controls are in place like quality control checklists. Students: What is your daily schedule like?

Ed: Well, I am usually the first one on the site in the morning and the last to leave at night. I walk the site at least twice a day. Once in the afternoon to see if the day has gone as planned. This provides me with good information for moving ahead with tomorrows work. I always walk the site in the morning to see who is there and who isn’t. This also allows me to communicate and give positive feedback to those on the site. I don’t know, but I think that it helps for everyone on the site to see the main man. It tells than that I’m watching and know what is going on. I am also there to coordinate and solve problems.

Students: Any last thoughts about being a superintendent?

Ed: There is more to do than you have time to do it in. This is my personal preference, but there are three key activities that I do every day. I have learned that if I don’t do these three things then I will not be successful. Maybe that is why I am always the last to leave because I know that I must get these three things done every day no matter what. They are:

(1) I set aside at least one hour a day in the morning after I have held morning meetings and communicated with whom ever, for paper work and keeping the paper work going with my project engineer and secretary.

(2) In the afternoon I always set aside about an hour to review the three-week rolling schedule and make sure that I have identified any problems and am ahead of the wave instead of being buried by it all the time.

(3) As part of the review of the three-week rolling schedule, that is when I do my own personal planner scheduling, do my daily report and track my to-do list.

I read in a good book somewhere that being a good superintendent was all about planning, organizing, directing and controlling. This is a continual cycle that I do everyday.

(Here is a picture of Ed meeting with the owner of the car dealership to review the work. Does he look happy?)

Self-Check Questions Lesson 2:

1. The main goal of a project superintendent is to:

a. Maximize profits in the long run while maintaining a standard of excellence. b. Maximize “quick buck” profits.

c. Managing time, cost and quality d. Show who is the boss

2. Covey defines leadership as: a. managing people effectively

b. ability to work through other people by winning their respect, confidence and loyalty c. A “bull-in-the-woods”

d. A born trait

3. In residential construction who is the primary representative of the company to the home owner?

a. sales agent

b. production manager c. superintendent

d. customer service representative

4. During the planning process, weather is usually only considered during which planning phase? a. quarterly b. monthly c. weekly d. daily e. c and d only

5. What’s in a name? Which one of the following titles conveys the fullness of the responsibility carried by the superintendent?

a. project manager

b. construction supervisor

c. builder

d. construction manager answers: 1-a, 2-b, 3-c, 4-e, 5-d

Lesson 2 Quiz:

Lesson 3: Understanding the Project Managers Role in Client

Relations

Introduction:

Successful construction project management is all about relationships. There is not a more important relationship than that of the project manager/superintendent and the client. The project manager/superintendent will spent more time with the client than any one else. Yet, often times that person may be technically competent but may have poor people skills or what we call “soft skills”. In a review of successful construction companies it becomes very clear that much of their success has come from repeat business. This is work that they did not have to compete for but were ‘handed’ because of a friendly, trusting relationship we call client loyalty. In fact most successful construction companies had their start by working for one or two clients that kept them very busy.

M. M. Lele in the book, The Customer is Key: Gaining an Unbeatable Advantage Through Customer Service (1987), states:

Keeping customers happy is the best defense against competition. The firm that keeps its customers happy is virtually unbeatable. Its customers are more loyal, and they buy more, more often. They're willing to pay more for the firm's products, and they stick with the firm through difficult periods, allowing it time to adapt to change.

The commitment to customer service has suffered tremendously over the last thirty years. L. Liswood has stated in the book, Serving Them Right: Innovative and Powerful Customer Retention Strategies (1990):

Through procedure manuals, policy guidelines, and computer systems, companies have lost touch with customers and have allowed this 'unholy trinity' to infiltrate the

organization and manipulate people's minds until the weakened and submissive organization is at their mercy. No action can be taken and no decisions can be made without first consulting this mighty triumvirate. Customers become fodder for the machine to chew them up and spit out if they do not behave as the system demands. T. Peters and R. Waterman in their historic work entitled: In Search of Excellence: Lessons from America's Best-Run Companies (1982) quote a comment made by Lew Young, who was at the time, Editor and Chief of Business Week. He expressed:

Probably the most important management fundamental that is being ignored today is staying close to the customer…in too many companies, the customer has become a bloody nuisance whose unpredictable behavior damages carefully made strategic plans, whose activities mess up computer operations, and who insists that purchased products should work.

Companies that are committed to customer service are successful now and will command the future. Construction contractors that desire to be successful are no different. Contractors must become better skilled in marketing their services and serving their customers if they are to continue to be successful in a very competitive and changing marketplace. Client retention presents an opportunity for contractors to distance themselves from their competition.

Lesson Objectives:

At the end of this lesson you should:

6. Learn the basic concepts of client retention.

7. Know the four areas of employee training in customer service.

8. Be able to describe the eight key strategies in developing a client retention system. 9. Know how to deal with angry clients.

10. Be able to explain the “Blueprinting Client Contacts Model”. 11. Understand owners needs.

How to Proceed:

(2) Read and review concepts 1-6 on Client Relations

(2) Answer the self-check questions to evaluate your readiness to take quiz 3.

(6) When you feel that you are ready, Take quiz 3.

Discussion Material:

Concept 1: Understanding Client Retention and Loyalty

1. Conquest vs. Retention Marketing: 75% of today's marketing dollar goes toward finding new clients ($140 billion). American businesses lose 180 million affiliations every year. The average U.S. corporation loses 50% of their customers every five years.

2. Why Clients Defect: 68% of clients defect because of employee indifference to their needs. 14% of clients defect because of product or service dissatisfaction. Too often client patronage is taken for granted. Clients often defect because of misunderstandings or incorrect expectations. 14% of clients defect because of complaints not being cared for. 9% of clients defect because of competition. 9% of clients defect because they moved. 68% of clients defect because of no special reason.

3. The Effects of Client Defection : 91% will never buy again from that company.

Dissatisfied clients will communicate their dissatisfaction to nine other people. One study showed that for large purchases, only 40 to 60% of clients will express their unhappiness. Another study showed that 90% of dissatisfied clients won't exert effort to complain, they just take there business elsewhere. In yet another study, it was shown that for every written complaint there is an average of 27 dissatisfied clients.

4. Benefits and Potential Losses of Client Retention : 65% of and average company's

business comes from satisfied clients. It costs 5 to 7 times as much to acquire a new client as to service an existing one. One research project showed that 100 companies in 12 industries showed that the longer clients stayed the more profitable they became. Another study showed that some companies boosted profits 100% by just retaining 5% more clients. Another study showed that because of company loyalty clients are willing to pay

more for products and services. Yet another study showed that a client who is loyal for four years will generate triple the profits from the first year. Another study showed that if a customer purchases $100 at the supermarket every week, this constant flow of revenue totals $5,200 year, $26,000 over five years, $52,000 over ten years. This clearly shows that satisfying clients retains employees for longer periods of time

Concept 2: Construction Markets are Changing

1. Changes in the market place : Marketing is new for most commercial construction contractors. Construction markets have become more complex with more alternative contracting methods. 1/3 of revenues for the top 400 contractors now comes from design-build. Professional Builder's annual client satisfaction survey shows that more clients are relying on word-of-mouth recommendations. A leading U.S. home builder accounts for 60% of sales from referrals ($3 billion plus company). There is a major move toward relationship and consultative marketing. There is a move away from the singular focus of the project completion to more of listening and understanding to the needs of the client. Contractors must have competent players on their team that can problem solve, enhance communication and build long-term relationships.

There are four areas of employee (including subcontractors and suppliers) training that are paramount in customer service.

1. Company's commitment to client satisfaction : The company’s client satisfaction plan should be well understood by each employee and what their part and responsibility is. 2. Communication Skills : Each employee should have proper training in the “soft skills”

including: listening skills, negotiating skills, telephone skills, verbal and written skills, presentation skills and how to properly manage a meeting.

3. Problem Solving Skills : These include: uncovering and understanding customer needs, how to identify and resolve problems before they become complaints, and measuring customer satisfaction.

4. Presentation training : How to speak before a group of people and deliver a persuasive speech.

Concept 3: The Eight Key Strategies of Successful Client Retention and Loyalty

1. Blueprinting customer contacts : Identify "moments of truth" where clients come in contact with employees and discovering fail points where service is most likely to go wrong.

2. Management service commitment to the client : Quality starts at the top. Companies that have achieved excellence in service have a strong vision and strategy for client service.

3. Employee Client Service Training : Employees should be given the knowledge, skill and authority to solve front line problems. Training should include communication, problem solving, presentation and performing in "moments of truth".

4. Managing a Client Information File : Tracking information about current and past clients' purchasing habits, future needs and other critical issues can be very helpful in identifying, acknowledging and maintaining long-term relationships.

5. Client Feedback : Well-designed client satisfaction surveys can give feedback that ensures that services are correctly focused on issues that are most important to the client.

6. Managing Client Complaints : Having a management system to receive and care for customer complaints can reduce customer defections.

7. Communicating With a Client after a Project is Completed : Effective methods of staying in front of your client may be special events, newsletters and other publications and affinity merchandise (i.e. any item that has your company's name, logo or trade mark).

8. Reclaiming Lost Clients : By searching for the root cause of client departures, companies with the desire to learn can identify business practices that need fixing and some-times, win the client back and reestablish the relationship on firmer ground.

Example of Blueprinting Customer Contacts:

The following is a flow chart showing how a commercial construction company may implement the blueprinting of customer contacts and the other seven key strategies for client loyalty. Note three of the following elements of the flow chart. (1) Pre- sale marketing and aftermarketing segments are divided by the contract approval and signing. (2) The moments of truth show which participants are involved in the different stages of the of client interaction. Notice that the project managers and superintendents are ranked #2 during the pre-sale proposal stage and ranked #1 during the aftermarketing phase. (3) The line of visibility shows that seven strategies interaction with the model but it is not visible to the client.

See Blueprinting Client Contacts (excel file)

Concept 4: Seeing the Project Through the Owners’ Eyes

A contractor must see the project through the owners’ eyes before they can begin to

understand their needs and how they can be of real value to them. There are ten key activities that an owner is trying to juggle when planning a new project. Only one of those activities involves the contractor.

1. Acquiring the needed real estate at a price and timetable that makes the project possible.

2. Acquiring the needed planning and zoning approvals to obtain a building permit. These may also include permitting from the department of transportation, fire marshal or a myriad of other organizations that are needed to get a building permit.

3. A growing challenge for many owners/developers is the increased demands by city, county and state municipalities to build off-site improvements. This can significantly increase the cost of a project.

4. The architectural design of the project must meet the functional needs of the project along with having a design appeal that that will sell itself. This could be a restaurant that must be planned for laborsaving operational flows for employees and also have customer appeal. McDonald’s and the golden arches perfected this idea in a very profitable way.

5. Owners and developers want to bring projects on-line quicker and at a lower cost. The selection of the appropriate contract method is becoming more popular to meet fast-track demands. These might include design-build, construction management, or design-build with a guaranteed maximum price.

6. The project must meet a financial bottom-line. Every project has a budget. There is always a point where the project is no longer financially feasible.

7. The owner/developer generally must acquire financing for the project and must adhere to certain financing requirements imposed by the lending institution.

8. The project must fit into a designated schedule. This schedule includes the

programming of all activities from initial concept to the project opening. The schedule is extremely important because every owner/developer wants to take advantage of peak sales seasons. An example is a retail store that wants to be open for the winter holiday season.

9. Finding the right contractor that can provide an acceptable cost and deliver the project on time and with the quality that is desired takes time.

10. After a project is completed and the facility is in operation, an owner/developer wants a facility that is trouble-free and will continue to grow in value. Most importantly, the facility should meet the objective that it was planned, designed and built for.

Concept 5: Ten Areas Where Project Relationships are Won and Lost

1. Meetings : How shall we conduct meetings? What is an effective meeting? How shall we record and distribute meeting minutes and action items? What can the contractor do to help make the owner’s job easier in this area?

2. Communication and paperwork : What communication does the owner want? What should be written and what should be oral? What is quality written and oral

communication? What are high priority communications and what are the time lines? What can the contractor do to help make the owner’s job easier in this area?

3. Payment for work : How should applications for payment be processed? How should change orders be processed? What can the contractor do to help make the owner’s job easier in this area?

4. Problems : What is the process that the owner and contractor will use to solve

problems? What can the contractor do to help make the owner’s job easier in this area? 5. Schedule : How does the owner prefer to have the schedule communicated to them?

What can the contractor do to help make the owner’s job easier in this area?

6. Quality : How should the quality aspects of the project be coordinated and managed? What can the contractor do to help make the owner’s job easier in this area?

7. Safety : How can the contractor and owner best coordinate all aspects of maintaining a safe work site? What can the contractor do to help make the owner’s job easier in this area?

8. Public Relations : What public relations activities does the owner have planned for the project during construction? How shall the owner and contractor coordinate public relations? What can the contractor do to help make the owner’s job easier in this area? 9. Owner Equipment Coordination : How would the owner like to manage the

coordination of owner equipment? What can the contractor do to help make the owner’s job easier in this area?

10. Project Closeout Process : How shall we manage the closeout process to ensure a smooth transition? What can the contractor do to help make the owner’s job easier in this area?

Concept 6: Dealing with Angry Clients

When you consider all the things that can go wrong on a construction project it can be overwhelming. That is why it is so important to develop good problem solving skills. A superintendent/project manager spends a majority of their time solving problems. And most of those problems deal with interpersonal interaction and communications. Consider the following 18 suggestions to assist you in developing your problem solving skills.

1. Don't ever get defensive of whatever or whoever is being discussed. 2. Seek to understand before you seek to be understood. (Stephen R. Covey)

a. Be a very good listener.

b. Don't interrupt them. Listen, listen, listen! You can't listen with your mouth open talking.

c. Ask a lot of questions to clarify what the real problem is.

d. Anger, frustration, or financial constraints can easily mask the real problem. e. There are usually two sides to every story.

f. Don't buy into their story or anyone else's without researching both sides of the issue. g. Don’t assume anything.

h. Repeat the concern as you understand it back to the client. Make sure you understand it clearly.

3. Put your personal ego away. Don't take things personally. "He who slings mud . . loses ground." (Chinese Proverb)

4. Keep a smile (not a grin) on your face! Give attention to the seriousness of the problem, but maintain a pleasant, cooperative attitude.

will be a challenge but will help your attitude toward achieving your objective - satisfying the client. The mental anguish is the real challenge.

6. Sometimes it is best to let the angry client vent their frustrations. Sometimes it is best to allow the over-angry client to cool down a little. Tell them you will get back to them in an hour. This will allow them and you to calm down and be more reasonable - then they will generally be more inclined to discuss the real problem and obtain an accurate list of concerns.

7. The bottom line is that an angry, frustrated client wants someone (you) to listen to him/ her without defending anyone or being interrupting.

8. Allow plenty of time when writing down a list of complaints. Repeat back the list to make sure it is accurate.

9. Do not apologize for things you don't even know about. Research the problem first. a. Don't ever sell out:

i. The Company

ii. The Superintendent/Project Manager iii. The Sales Consultant or Marketing Person

iv. Another individual

10. Whenever possible make sure the person being discussed is there to defend him/herself. 11. Never surrender authority.

a. Simply apologize for their frustration and tell them you will check into the problem and specify a time when you will call them back.

b. Ask for all available phone numbers (home, office, beeper, cell phone, fax) so that you can reach them.

c. Then do it and get back with them in the specified time. 12. Do not pass judgment until you understand the problem.

a. Get help when you need it.

b. When researching a problem, go to the source. Do not form opinions or assumptions. 13. Never put client concerns on a back burner. Attack the problem aggressively.

14. Make promises and commitments only after you thoroughly understand the real problem. Under-promise and over-deliver.

15. When resolving an issue, make it a top priority. The quicker you fix the problem, the quicker you restore client confidence. The goal is always to satisfy the client and maintain their confidence. It is the right thing to do. Besides it makes perfect business sense. Referrals come from satisfied clients and builds loyalty.

16. Always follow-up.

a. Keep the client updated on progress.

b. Follow-up to make sure the problem is resolved.

c. Maintain ownership of the problem until it is given to the right person and all parties understand that ownership has been transferred.

17. If a project manager or regional manager is involved, please be sure to follow up with him/her so he/she can follow up also.

18. Be loyal to the client. When asked by others about your angry client, simply answer,

"He/She's fine, just a few problems that we need to solve." Be positive and don't make fun of the clients or their concerns.

Self-Check Questions Lesson 3:

1. What is the best defense against competition? a. lowest prices

b. best looking model home

c. quality policy and procedure manuals d. keeping customers happy

2. It costs _____ to _____ times more to acquire a new client as to service an existing one.

a. 1, 2

b. 3, 5

c. 5, 7

d. 8, 10

3. There are four areas of employee training that are paramount in customer service. Uncovering and understanding customer needs comes from what category?

a. Companies commitment to client satisfaction b. Communication skills

c. Problem solving skills d. Presentation skills

4. Which of the following are not one of the eight key strategies of successful client retention and loyalty?

a. Managing payment of work b. Reclaiming lost customers c. Blueprinting customer contacts d. Employee client service training

5. Considering dealing with angry clients, which of the following statements are false? a. Never surrender authority. Apologize and tell them you will check into the problem

and specify a time when you will call them back.

b. Never put the client on the back burner. Attack the problem aggressively.

c. The bottom line of an angry client is that they want the superintendent or project manager to tell them what is going on.

d. Whenever possible, make sure that the person being discussed is there to defend him/self.

(Self-Check answers: 1: d, 2: c, 3: c, 4: a, 5: c)

Lesson 3 Quiz:

Lesson 4: The Project Team and Delivery Systems

Introduction:

This lesson focuses on the construction project team and the different types of contract delivery methods.

Synergy has been described as 1 + 1 = 3. Functioning teams should have the same type of effect. The value of the team as a whole is much more valuable than each individual member. It is important to understand who the players are on the construction team, their roles and responsibilities and the rules that govern the how the game is played.

Each different delivery system (contract type to perform the work) carries with it a different set of rules and players. Each system has its advantages and disadvantages. It is important to understand these differences so that you can be successful.

Lesson Objectives:

At the end of this lesson you should:

1. Understand the different types of contract delivery systems. 2. Be able to describe the stages of team development.

3. Better understand the roles of the owner, architect and the contractor as team players. 4. Be able to describe and evaluate a project using a stakeholder analysis.

5. Understand how risk is managed with certain contract delivery systems.

How to Proceed:

(3) Read and review the discussion materials.

(2) Read and review Construction Jobsite Management, chapter 1, pg. 1-26. (7) Answer the self-check questions to evaluate your readiness to take quiz 4. (8) When you feel that you are ready, Take quiz 4.

Discussion Materials:

Concept 1: Team Development

Team development is an interesting thing. Some years ago I came across a model that has helped me in project management. Though all groups are unique and ever changing they have some common and identifiable variables. Groups and teams usually develop in four progressive steps:

Stage 1: Forming – relationships are high and task effectiveness is at its lowest. Stage 2: Storming – relationships bottom out while effectiveness begins to bottom out. Stage 3: Norming – relationships are improving, effectiveness increases slightly. Stage 4: Performing – relationships are high and task effectiveness is high.

Relationships Effectiveness High Low High Low Forming Storming Norming Performing Stage 1: Stage 2: Stage 3: Stage 4:

Stages of Team Development

As your project team comes together there is a pretty good chance that the team will go through this process. You can expect that the initial excitement (honeymoon stage) of the project will quickly rub off and relationships will hit a low. But, over time, the team will begin to come together and the overall effectiveness of the group will increase substantially. During the

storming step team members are learning to communicate and work together. I’ve often referred to this as the “learning to dance together” stage. In a later lesson we will address this more deeply. After the first two stages, relationships deepen and usually effectiveness increases. How long does this process take? It depends on how closely the team members work together, the nature of the work and personalities. It is exciting to see a team who like one another and are at a high performance level. There are occasions when teams never get past storming. You may know of some.

Concept 2: Stakeholder Analysis

A stakeholder is anyone who has a vested interest in the project. Unfortunately under a lump sum agreement owner and contractors are at natural odds with each other. The owner wants high quality at the least cost, and the contractor wants to maximize every opportunity for increased profits. These two stakeholders have different interests.

Consider the following table that takes at look at the varied stakeholder interests on a project.

Stakeholder Analysis Table:

Stakeholder

Maximize

Time

Cost

Quality

Owner

Contactor

costs Only provide what was bid

Architect

beauty Sides with owner Doesn’t want to cut design Highest quality

Regulatory

Agency

Life safety and code

compliance

Doesn’t care Doesn’t care Just has to meet code

compliance

Property

Neighbor

Financial values and least interruption

Less time Doesn’t care Highest quality, maximize values

Does it surprise anyone why there are project disagreements! Everyone seems to be pulling in different directions. One of the main reasons for the increase in alternative delivery methods is to stop this confrontational approach and get the contractor, owner and architect all working together with the same motives. There also have been advances made in working together with regulatory agencies. The principle of Partnering will be discussed in a future lesson.

Concept 3: Delivery Systems and Risk

Construction contract delivery methods are all about managing risk. In a lump sum agreement the contractor assumes the greatest risk but may also be more profitable. On the other end of the spectrum the CM contract has almost no risk but also has no opportunity for increased profits. It is interesting to note that architects carry little risk on projects. It is because of this that in many areas of the country architects have been regulated to a reduced role and contractors have now assumed to role of the Master Builder. This is all because of project influence and risk. See the following graph to illustrate this principle.

Managing Risk

(Contractors Perspective, Owner would be Reverse)

Profits $

Degree of Risk

Low High

High Lump Sum Contract

CM Contract CM/GMP Contract

Self-Check Questions Lesson 4:

1. In a traditional lump sum contract delivery system, there is a contract between the contractor and the architect.

a. true b. false

2. Cost plus, a GMP is:

a. the same as “time and material”

b. cost plus a fee, often splitting savings with the owner c. lists of quantities of components, priced per unit d. the most common delivery system

3. You can expect the most problems in team development during:

a. stage 1

b. stage 2

c. stage 3

d. stage 4

4. Most BYU CM majors, who go into commercial construction, start out as a _____________ when they graduate.

a. project manager b. contract administrator c. superintendent

d. project engineer

5. An architect as a stakeholder wants to maximize: a. overall value

b. profitability c. design and beauty

d. life safety and code compliance (answers: 1-b, 2-b, 3-b, 4-d, 5-c)

Lesson 4 Quiz:

Lesson 5: Commercial Project Preparation and Reviewing

Construction Documents

Introduction:

Preparation for a project is a critical activity. In a previous lesson we have discussed the preparation of a project baseline plan and how to measure progress of time and money. This lesson goes into more detail as to the reviewing of the construction drawings and specifications (project manual). It also provides an example of how a project manager or superintendent would review drawings and specifications in preparation for starting a new project. In future lessons we will discuss reading, writing and understanding contracts, budgeting and cost controls,

productivity and jobsite layout and quality control preparation.

Lesson Objectives:

At the end of this lesson you should:

6. Understand the seven areas that project managers manage. 7. Know how to complete a Project Risk Assessment Worksheet

8. Be able to review a project manual and understand how to use it to administer the project.

9. Know how to review drawings in preparation for construction.

10. Understand how during work right the first time can solve future problems. 11. After completion of assignment 2, be able to critically analyze a project from 17

different viewpoints and be able to write a Project Risk Assessment from the planning stage to the recording of the outcome of the actual project. This ‘real world’

simulation will help prepare you for better project planning and modeling problem solving skills.

How to Proceed:

(4) Read and review the discussion materials.

(2) Read and review Construction Jobsite Management, Chapter 2, pg. 27-54.

(9) Become familiar with the AIA Document A 201, General Conditions of the Contract for Construction found in the Appendix in Construction Jobsite Management, pg. 401-426. (10)Answer the self-check questions to evaluate your readiness to take quiz 5.

(11)When you feel that you are ready, Take quiz 5. (12)Read, review and complete assignment 2.