Construction Management

CONSTRUCTION MANAGEMENT

Table of Content

INTRODUCTION

CHAPTER 1: CONSTRUCTION MANAGEMENT OVERVIEW



What is Construction Management?



Construction Management System



Construction Management Roles, Responsibilities & Risks



Benefits of Construction Management



Construction Manager



Construction Engineering

CHAPTER 2: CONSTRUCTION INDUSTRY



World Construction Industry



Construction Industry Trends



Construction Industry Research



Residential Construction Industry



Commercial Construction Industry

CHAPTER 3: CONSTRUCTION PROJECTS MANAGEMENT



Types of Construction Projects



Construction Processes



Construction Careers



Project Risk Management



Project Management Methodologies

CHAPTER4: SCHEDULING TECHNIQUES FOR CONSTRUCTION PROJECTS



Bar Charts and Linked Bar Charts



Network Analysis and Critical Path Method



Line of Balance



Q Scheduling

CHAPTER 5: CONSTRUCTION ESTIMATING



Purpose of Estimating



Types of Construction Estimates



Steps in Preparation of an Estimate



Building Cost Estimate

CHAPTER 6: CONSTRUCTION COST CONTROL



Cost Control and Cost information Systems



Developments in Cost Control Systems

CHAPTER 7: CONSTRUCTION CONTRACTS ADMINISTRATION



Construction Contract



Contract Administrator



Construction Accounting

CHAPTER 8: CONSTRUCTION PRACTICE



Equipment Costs



Building Material



Safety

INTRODUCTION

There are several different approaches to building a major project. One such approach is that of construction management. There is some confusion as to what construction management is and what is involved. Basically construction management involves some form of professional expertise that is focused in the specialized areas of cost, estimating, systems analysis and supervision. Construction management is headed up by the construction manager (CM). This person is in complete and total control of the entire project from start to finish. The role of the construction manager may differ from project to project and it will depend on which construction company he/she works for.

Construction Management is a consulting firm providing project management services. Any private or public investor can call upon the corporation's services to design and implement real estate or industrial projects across Europe.

The knowledge and know-how acquired in the long standing practice by Construction Management as part of a leading building and civil engineering (BCE) group ensure its ability to optimize building projects. This applies to quality, cost as well as to terms of delivery, both for new buildings or renovation projects.

Construction Management offers services for developing feasibility studies, drawing up building programs, fine-tuning construction documents and coordinating the various parties involved in the project.

High-performance management and information tools as well as multidisciplinary teams suited to each market allow Construction Management to respond optimally to customer needs.

CHAPTER 1

CONSTRUCTION MANAGEMENT OVERVIEW

What is Construction Management?

Construction Management refers either to the study and practice of the managerial and technological aspects of the construction industry (including construction, construction science, construction management, and construction technology), or to a business model where one party to a construction contract serves as a construction consultant, providing both design and construction advice.

The Construction Management Association of America (CMAA) says the 120 most common responsibilities of a Construction Manager fall into the following 7 categories: Project Management Planning, Cost Management, Time Management, Quality Management, Contract Administration, Safety Management, and CM Professional Practice which includes specific activities like defining the responsibilities and management structure of the project management team, organizing and leading by implementing project controls, defining roles and responsibilities and developing communication protocols, and identifying elements of project design and construction likely to give rise to disputes and claims.

Study and Practice

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

The recognized institute for construction management in Great Britain is The Chartered Institute of Building in Ascot.

According to the American Council for Construction Education (the academic accrediting body of construction management educational programs in the U.S.), the academic field of construction management encompasses a wide range of topics. These range from general management skills, to management skills specifically related to construction, to technical knowledge of construction

methods and practices. There are many schools offering Construction Management programs, including some that offer a Masters degree.

Business Model

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

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

 Design Build Contracts

Recently a different business model has become more popular. Many owners - particularly government agencies have let out contracts which are known as Design-Build contracts. In this type of contract, the construction team is known as the design-builder. They are responsible for taking a concept developed by the owner, completing the detailed design, and then pending the owner's approval on the design, they can proceed with construction. Virtual Design and Construction technology has enabled much of the ability of contractors to maintain tight construction time frames. There are two main advantages to using a design-build contract. First, the construction team is motivated to work with the design team to develop a design with constructability in mind. In that way it is possible for the team to creatively find ways to reduce construction costs without reducing the function of the final product. The owner can expect a reduced price due to the increased constructability of the design.

The other major advantage involves the schedule. Many projects are given out with an extremely tight time frame. By letting out the contract as a design-build contract, the contractor is

established, and early mobilization and construction activities are able to proceed concurrently with the design. Under a traditional contract, construction cannot begin until after the design is finished, the project is bid and awarded, and the team can mobilize. This type of contract can take months off the finish date of a project.

 Agency CM

Construction Cost Management is a fee-based service in which the Construction Manager (C.M) is responsible exclusively to the owner and acts in the owner's interests at every stage of the project. The construction manager offers advice, uncolored by any conflicting interest, on matters such as:

 Optimum use of available funds;

 Control of the scope of the work;

 Project scheduling;

 Optimum use of design and construction firms' skills and talents;

 Avoidance of delays, changes and disputes;

 Enhancing project design and construction quality;

 Optimum flexibility in contracting and procurement.

 Cash flow Management.

Comprehensive management of every stage of the project, beginning with the original concept and project definition, yields the greatest possible benefit to owners from Construction Management. As time progresses beyond the pre-design phase the CM's ability to effect cost savings diminishes. The Agency CM can represent the owner by helping to select the design team as well as the construction team and manage the design preventing scope creep, helping the owner stay within a pre-determined budget by performing Value Engineering, Cost/Benefit Analysis and Best Value Comparisons. The Agency CM can even provide oversight services for a CM At-Risk contract.

 CM At-Risk

CM at-Risk is a delivery method which entails a commitment by the construction manager to deliver the project within a Guaranteed Maximum Price (GMP), in most cases. The construction manager acts as consultant to the owner in the development and design phases, (often referred to as "Preconstruction Services"), but as the equivalent of a general contractor during the construction

phase. When a construction manager is bound to a GMP, the most fundamental character of the relationship is changed. In addition to acting in the owner's interest, the construction manager must manage and control construction costs to not exceed the GMP, which would be a financial hit to the CM Company.

CM "At Risk" is a global term referring to a business relationship of Construction contractor, Owner and Architect / Designer. Typically, a CM at Risk arrangement eliminates a "Low Bid" construction project. A GMP agreement is a typical part of the CM and Owner agreement somewhat comparable to a "Low Bid" contract, but with a number of adjustments in responsibilities required by the CM. Aspects of GMP agreements will be elaborated below. The following are some primary aspects of the most potential benefits of a CM at Risk arrangement:

Budget management

Before design of a project is completed ( 6 months to 1-1/2 years of coordination between Designer and Owner), the CM is involved with estimating cost of constructing a project based on hearing from the designer and Owner (design concept) what is going / desired to be built. Upon some aspect of desired design raising the cost estimate over the budget the Owner wants to maintain, a decision can be made to modify the design concept instead of having to spend a considerable amount of time, effort and money re-designing and/or modifying completed construction documents, OR, the Owner decides to spend more money or obtain higher financial support for the project. To manage the budget before design is done, construction crews are mobilized, CM is spending tens of thousands per week just having onsite management, major items are purchased, etc, etc,...is an extremely more efficient use of everyone's time, effort, Architect / Designer's costs, and the CM's General Conditions costs, AND delivering to the Owner a design within his budget.

Construction Management System

It facilitates the maintenance of necessary data as well as generation of reports and queries for planning, design, construction and monitoring of irrigation projects. The system provides accurate and relevant information to support effective decision-making at different levels. It improves the management of high-volume data and minimises information delays at different management levels, and also provides effective ways to share data and information among various management levels and concerned field offices. The application is easily accessible to the user, as and when needed. The construction management system comprises the following modules:

 Configuration

 Land Acquisition

 Rehabilitation and resettlement

 Schedule of rates’

 Procurement

 Construction management and monitoring

 Project management’

 Resource requirement planning

 Accounts

 Stores and inventory management

 Assets

 On-farm development works

 Environment management plan

 Quality control

 Water users' association

 System administration and data transfer

Construction Management Roles, Responsibilities & Risks

The following material is provided for informational purposes only. Before taking any action that could have legal or other important consequences, speak with a qualified professional who can provide guidance that considers your own unique circumstances.

In search of additional revenue streams, design firms often consider offering construction management services. Providing such services can generate income and increase the value delivered to the project owner. However, construction management can also bring additional liabilities, including those often associated with contractors. For this reason, any design firm considering construction management services must be prepared to identify and manage those risks.

The term “construction management” generally relates to services provided by a consultant acting as a representative of the project owner. These services typically involve administering the design and construction contracts and may include responsibility for managing or coordinating the

planning, design and construction phases of the project. Construction management services can be performed by an independent party on a standalone basis, or by an architect or engineer who also provides design services on the project. Work scopes for the construction manager (CM) can be tailored to meet a variety of owner needs, project types and project delivery methods.

The scope of services provided, as well as the associated liabilities that result, depend greatly on the construction management role performed by the design firm. The two primary roles are CMAdvisor and CMConstructor.

CMAdvisor

In the CMAdvisor role, the design professional serves as a consultant to the project owner. The primary responsibility is administering the construction contract through the design and construction phases of the project. Duties may also include preconstruction services such as cost estimating, scheduling and constructability reviews.

The CMadvisor typically has a contractual agreement with the client only, not with the contractor or other parties to the construction. CMAdvisors do not award contracts, direct construction means and methods, or arrange for materials or labor.

The CMAdvisor may or may not also be a designer on the project. When the CM only provides advisory services and does not design the project, the role is sometimes called CMAgent.

CMConstructor

The CMConstructor role entails responsibilities typically associated with contractors. In addition to the advisory roles described above, the CMConstructor typically:

 Holds all subcontracts for construction

 Is responsible for tasks of contract management and construction

 Assumes the same warranties as the general contractor, taking responsibility for the entire construction project

 Assumes the same risks as a general contractor, including jobsite safety

Licensing Issues

To our knowledge, no state or province licenses construction managers. However, the Construction Management Association of America (CMAA) does provide instruction and training and issues a “Certified Construction Manager” certificate.

You could likely provide most, if not all, of the services of a CMAdvisor under your architecture or engineering license or registration. If, however, you're acting as a CMConstructor, you may be required to obtain a contractor’s license, depending on your jurisdiction and duties. Regardless of your role, check with your local contractors’ licensing board, professional licensing board and/or professional association to see whether a license is required.

Insurance Issues

Most professional liability (PL) policies will cover any claims arising from the professional services a design professional renders as a CM. However, most PL policies won’t cover construction risk i.e., faulty workmanship. This would include problems with fabrication, erection, installation, assembly and the supplying of products and materials.

In addition, there is no coverage available for the economic risk of providing a guaranteed maximum price.

PL policies may also specifically exclude claims relating to jobsite safety. Some may even contain a general exclusion for claims arising out of services not “usual and customary” to the practice of architecture or engineering or they may cover only those professional disciplines specified in the policy. Unless these exclusions can be modified or construction management is specifically listed as a covered service, there may not be professional liability coverage in force for such services.

Design firms considering providing construction management services should get a complete insurance review. We’ll be happy to help you examine your needs for PL, general liability, workers compensation and other types of coverage.

General Risks to Consider

There are several areas of liability to watch for when providing construction management services. The degree to which you assume any of these risks depends on your role as a CM and your responsibilities as stated in your contract and demonstrated by your actions. Consider the following:

Design: When CMs conduct design and constructability reviews, they may, along with the architect or

engineer of record, be subject to claims involving design errors and omissions.

Selection of materials: CMs may have exposure arising from the selection and timely delivery of

construction materials and subsystems.

Cost estimates: Project owners typically have high expectations that a CM’s construction cost

estimates are accurate. If costs exceed a CM’s estimate, there is substantial risk of a claim.

Jobsite safety: CMs may assume responsibility for construction means and methods, as well as the

contractor’s jobsite safety program and safety plans. OSHA rulings have generally concluded that a CMConstructor’s responsibilities for jobsite safety are akin to those of a general contractor.

Scheduling and coordination: Work not performed on schedule or not well coordinated can lead to

claims for project delays, increased overhead expenses and added overtime costs.

Hazardous site conditions: If not careful, the CMConstructor can assume liability for existing

hazardous site conditions. In addition, if toxic materials on the site must be disposed of or transported, the CM can be deemed an “operator” of the site or an “arranger” of the disposal and thus subject to severe (and sometimes criminal) sanctions in the event of an illegal dumping or accident.

Managing CM Risks

Once you understand the risks of construction management, you can make an informed decision as to whether or not to offer such services. If you decide to offer construction management services, keep the following in mind:

 Select your projects and clients cautiously. Because the CM will no doubt be brought into any significant claims, it is important to avoid clients with a litigious history or project types that are likely to have problems.

 Choose your CM role with care. Offer only those services you and your staff are qualified to provide.

 Be aware of your jurisdiction’s licensing requirements. Obtain all licenses required by your state or province to provide the services you intend to offer and then operate within the scope of your licenses.

 Negotiate solid contracts. The AIA, AGC (Associated General Contractors), CCA (Canadian Construction Association) and CMAA have all published standard form agreements for CMs that can be tailored by you and your attorney to fit your specific project needs.

 Develop a clearly defined scope of services. With the client, put together a detailed work scope that describes precisely the specific responsibilities of each party to the project, including the owner.

 Charge adequate fees in consideration to the level of risk you must assume.

 Make sure that your words and actions, particularly on the jobsite, are in keeping with your role. If you are the CM Advisor, for instance, your job is to recommend and advise, not to direct or supervise.

 Check your insurance. Talk with us to be sure you have appropriate coverage. We’ll help you ascertain whether your professional liability policy covers the professional services you intend to provide. If you perform as a CM Constructor, we will need to address bonding, workers compensation and general liability issues.

 Limit your exposure to claims involving jobsite safety. Include appropriate “means and methods” disclaimers in your contract. Allocate health and safety risks through indemnities and insurance. Train your field people so their actions don’t undermine these protections. Ask to be

named as an additional insured on the contractor’s liability policies and request certificates as proof that appropriate workers compensation coverage is in place.

 Consider, with advice from legal counsel, establishing a separate corporate entity for your construction management services. This can help limit your liabilities for these riskier services.

Dealing with a Third Party CM

If you are a designer on a project for which the owner has hired a third party CM Agent,

your chances of facing a claim may increase. Not only do you have another pair of eyes critiquing your design services, there may be a greater chance of error or omission due to confusion regarding duties, responsibilities and authorities. Talk with your attorney about including a contract clause that addresses this risk. We can provide sample language for you to consider.

Benefits of Construction Management

There are several benefits to construction management. The major or most important benefit to this form of management is that there is a constant watching of the project. This is good if any problems arise, they can then be quickly taken care of. The CM is also there to keep things in line and to keep the project moving smoothly to ensure that there are no delays in the project. The construction manager is also in charge of creating a time table from which the construction workers will work from. This will ensure that things are going on schedule and from this the CM can determine any things that can be fast-tracked during the completion of the project.

Some of the other advantages of construction management include such things as construction costs being identified and predicted during the design phase. This is one of the most important things that a CM will be responsible for. Predicting the cost of a project is important as the owner does not want to allot to little money and in return he/she does not want to spend more than expected. The CM is responsible for creating a budget from which the construction company will work. By planning this detailed budget the CM is therefore avoiding any potential delays in the project. Construction management or the construction manager is responsible for the entire construction of the project. This means that no additional personnel are required on site to manage the project.

However, construction management is not without its problems. Due to the fact that there is usually a single person handling the entire project there have been instances when the project is not

completely planned out prior to its start date. This does create some problems as there might be a delay in construction due to the lack of adequate planning.

Also depending on the construction company being dealt with the construction management team may not have the complete ability to influence construction schedules.

If you are interested in finding out more about construction management then you might consider attending some of the many seminars on the topic. As more and more people become interested in having a construction manager on site, seminars and construction management courses are being created and are being conducted all over the United States and Canada. Today there are even schools and colleges in the United States that are adding construction managements courses to their list of degree programs. People have a better chance of getting a job as a construction manager if they have been trained in the area of construction management. It has also been found that people who have had a background in business and finance are more likely to be hired as part of construction management teams as it believed that people are more inclined to be properly prepared for planning and budgeting. Since planning is a major part of this job, most employers are looking for someone who has had extensive experience in planning and carrying out major projects in which they are in charge of a large group of people and projects within the one big project.

Construction Managers

What Is a Construction Manager?

A construction manager is the person who handles a construction job from start to finish. This individual will have a primary hand in planning the job as well as overseeing the project along the way. The construction manager will plan, direct and budget a construction project as well as handle any issues which arise during the job.

Within the scope of a major construction project, a construction manager or management team is trained to coordinate the different processes and timetables necessary to complete a project. These individuals and teams mediate between owners, designers, contractors, and suppliers. As such, they act as overseers of the entire process, from inception to design to execution.

Significant Points

 Construction managers must be available—often 24 hours a day—to deal with delays, bad weather, or emergencies at the jobsite.

 Employers prefer jobseekers who combine construction industry work experience with a bachelor’s degree in construction science, construction management, or civil engineering.

 Although certification is not required, there is a growing movement toward certification of construction managers.

 Excellent job opportunities are expected.

The Role of a Construction Manager

A construction manager is essentially a high level manager who focuses on the coordinating the different needs of a project on a large scale. In particular, the construction manager is responsible for maintaining the relationship with all the contractors and subcontractors to ensure the smooth and timely completion of a project.

The most important aspect of the position is that of defining the structure of the project management team and assigning responsibilities to each member. Beyond this, the construction manager arranges and maintains project relationships with the trade contractors and designers associated with particular aspects of the project, including setting timetables for the completion of certain sections and resolving conflicts as they arise.

Beyond coordinating the internal workings of a project, the manager must develop plans to handle external concerns. These include handling equipment and materials suppliers, developing plans with local emergency and fire departments for on-site safety, and risk management.

Construction is an activity which goes on in almost every city and town on a daily basis. Something is constantly being built or renovated wherever we look. A construction manager is the individual who oversees such projects and ensures that they are completed as they should be. The following will highlight information relating to the job role of a construction manager and detail the importance of such a position.

General Responsibilities of a Construction Manager

The construction manager has some general responsibilities which correspond with the job role. They are the ones who help in the acquisition of land, the planning process, obtain permits, hire workers, keep tabs on the progress of the construction job and ensure that it is being completed in a correct manner. They are the go-to person for most of the parties involved with the entire project. The construction manager is also responsible for handling complaints or problems along the way.

Specific Duties of a Construction Manager

A construction manager is responsible for a multitude of tasks. One specific duty which a construction manager must complete is to look over a proposed project to determine what necessary jobs need to be completed prior to beginning the project. The construction manager must review the project in depth so that he/she thoroughly understands what will be needed along the way.

Once the project is reviewed by the construction manager, that individual must then aid in the procurement of land for the project site. The construction manager is an important part of this phase as they will know what type of land is necessary, the size which is required and so forth. It is important for the construction manager to be part of this acquisition.

Construction managers are also responsible for hiring and supervising workers. The construction workers will be interviewed by the construction manger, hired, disciplined and even fired by that individual should it be deemed necessary. Any problems that arise with regard to the construction workers will be brought to the attention of the construction manager who will deal with it accordingly.

Many construction managers are also given the duty of providing a budget for the construction project. The construction manager will detail the costs that will be seen as a result of the project and determine what is in the budget and what may not be. The individual must take various factors into account such as wages and materials, to name just two of the many factors one must consider.

A construction manager must also order supplies for completing the construction project. These supplies range anywhere from nails to bulldozers. It is up to the construction manager to shop around for the least expensive yet most reliable materials all the while keeping the project budget in mind.

Some construction managers will have to handle the contract end of construction projects. They will have to hire individuals to draft the relevant paperwork and ensure that the documents are signed by the right parties. This includes contracts with the subcontractors, architects and suppliers to name just a few.

An important duty of the contract manager is to manage the construction schedule in an effective and efficient manner. This is crucial as any delays in the project may cause a substantial amount of money. Therefore, the construction manager must ensure that everyone involved does their utmost to stay on schedule and should issues arise it is up to the construction manager to resolve them.

Construction managers must also inspect and review the construction project on a periodic basis to ensure compliance with safety code and building code regulations. This is vital as well since

any violation could mean a delay in the project if not cancel the project altogether. Therefore, the manager must be sure to inspect as frequently and efficiently as possible.

The construction manager is the one who will supervise the project and determine that the job is being done correctly. He must review the entire project on a daily basis to ensure that the work is being done as it should be. If there appears to be any deviation from the planned construction project, it is up to the construction manager to get the project back on the right track.

Positive Traits for Construction Managers to Possess

A construction manager should possess certain traits. By having the following traits, the individual will find that their job can be better completed. One who fills the job role of construction manager should be a multitasker. Those who are able to handle multiple tasks at the same time will excel in this position. Since the specific duties of a construction manager are wide and varied, it will certainly help if one possesses good multitasking skills.

Construction managers should also have excellent problem solving skills. In construction jobs problems will arise from time to time and the individual who will have to solve such problems is most likely the construction manager. Given the fact that this individual will usually have many years of construction experience, problem solving should not be a problem for that person. However, individuals who have natural problem solving skills will find that the job role is much easier to fill in the end.

A construction manager should be timely in nature. Construction jobs are projects which almost always need to be completed in a timely manner. If the construction manager is a time-conscious individual, then he/she will be able to confidently lead the construction crew so that they finish in a timely fashion.

A construction manager wears many hats. They are a supervisor, planner and sometimes worker to boot. This is an interesting job as it requires a multitude of talents to carry out such a role. One who is a construction manager will succeed in their job if they can adequately lead their workers to complete the job correctly. By possessing traits such as multitasking abilities, timeliness and good problem solving skills, the construction manager will be able to complete their daily job tasks quickly and efficiently.

Construction Engineering

Construction engineering concerns the planning and management of the construction of structures such as highways, bridges, airports, railroads, buildings, dams, and reservoirs. Construction of such projects requires knowledge of engineering and management principles and

business procedures, economics, and human behavior. Construction engineers engage in the design of temporary structures, quality assurance and quality control, building and site layout surveys, on site material testing, concrete mix design, cost estimating, planning and scheduling, safety engineering, materials procurement, and cost engineering and budgeting.

Construction management is similar to construction engineering from the standpoint of the level of mathematics, science and engineering used to analyze problems and design a construction process.

Career

The construction industry in the United States provides employment to millions with all types and levels of education. Construction contributes 14% of the United States Gross National Product. Construction engineering provides much of the design aspect used both in the construction office and in the field on project sites. To complete projects construction engineers rely on plans and specifications created by architects, engineers and other constructors. During most of the 20th century structures have been first designed then engineering staff ensure it is built to plans and specifications by testing and overseeing the construction. Previous to the 20th century and more commonly since the start of the 21st century structures are designed and built in combination, allowing for site considerations and construction methods to influence the design process.

Work Activities

Construction engineers have a wide range of responsibilities. Typically entry level construction engineers analyze reports and estimate project costs both in the office and in the field. Other tasks may include: Analyzing maps, drawings, blueprints, aerial photography and other topographical information. Construction engineers also have to use computer software to design hydraulic systems and structures while following construction codes. Keeping a workplace safe is key to having a successful construction company. It is the construction engineer's job to make sure that everything is conducted correctly. In addition to safety, the construction engineer has to make sure that the site stays clean and sanitary. They have to make sure that there are no impediments in the way of the structure's planned location and must move any that exist. Finally, more seasoned construction engineers will assume the role of project management on a construction site and are involved heavily with the construction schedule and document control as well as budget and cost control. Their role on site is to provide construction information, including repairs, requests for information, change orders and payment applications to the managers and/or the owner's representatives.

Skills

Construction engineers should have strong understanding for math and science, but many other skills are required, including critical thinking, listening, learning, problem solving, monitoring and decision making. Construction engineers have to be able to think about all aspects of a problem and listen to other’s ideas so that they can learn everything about a project before it begins. During project construction they must solve the problems that they encounter using math and science. Construction Engineers must maintain project control of labor and equipment for safety, to ensure the project is on schedule and monitor quality control. When a problem occurs it is the construction engineer who will create and enact a solution.

Abilities

Construction engineers need different abilities to do their job. They must have the ability to reason, convey instructions to others, comprehend multi variables, anticipate problems, comprehend verbal, written and graphic instructions, organize data sets, speak clearly, visualize in 4D time-space and understand Virtual Design and Construction methods.

Educational Requirements

A typical construction engineering curriculum is a mixture of engineering mechanics, engineering design, construction management and general science and mathematics. This usually leads to a Bachelor of Science degree. The B.S. degree along with some construction experience is sufficient for most entry level construction engineering jobs. Graduate school may be an option for those who want to go further in depth of the construction and engineering subjects taught at the undergraduate level. In most cases construction engineering graduates look to either civil engineering, engineering management, or business administration as a possible graduate degree. For authority to approve any final designs of public projects (and most any project), a construction engineer must have a professional engineers (P.E.) license. To obtain a P.E. license the Fundamentals of Engineering exam and Principles and Practice in Engineering Exam must be passed and education and experience requirements met.

CHAPTER 2

CONSTRUCTION INDUSTRY

Construction Industry is one of the most booming industries in the whole world. This industry is mainly an urban based one which is concerned with preparation as well as construction of real estate properties. The repairing of any existing building or making certain alterations in the same also comes under Construction Industry. This industry can be categorized into three basic categories namely:-

 Construction involving heavy and civil engineering. The construction of large projects such as bridge, road, etc comes under this category.

 General construction. The construction works that involve building of real estate ones such as residential or commercial real estate assets, etc.

 Construction projects involving specialty trades.

 Construction works that involve building up of specialized items namely, electric related works, works on woods, etc.

It is generally being observed in the all around the globe in the Construction Industry that the contractor individual or organization involved in the construction process specialize in any one of the above mentioned categories. A contractor who is involved in building real estate do not generally go for specialized trade or heavy engineering works. The same is also true for other kind of contractors. Construction Industry is a booming industry and remains so with the continuation of the development process especially in the developing countries. With the process of development, the migration of people takes place from the rural to urban areas. This phenomenon is most significantly observed in the "Asian Tiger" countries, China and India. Thus, the Construction Industry is also on a rise in such countries.

World Construction Industry

World Construction Industry is one of the biggest industries in the whole world. The contribution of this industry towards the global GDP revolves around one-tenth of the total amount. World Construction Industry is also a potential employment generator and provides work to almost seven percent of the total employed person in the whole world. The extent of this industry has become so vast that the energy, in the form of electricity or fuel, consumed by it hovers around

two-fifth of the total energy consumed all over the globe. The resources that are utilized in World Construction Industry is also staggeringly high and itself consumes fifty percent of the total world resources.

World Construction Industry is the base of the world economy which is achieved through the construction of real estate properties (both residential and commercial), bridges, tunnels, roads, railway tracks and compartments, airports, etc.

World Construction Industry has come up as a basis for judging the performance of the economic condition of a country. This industry is not a homogeneous entity but has heterogeneous characteristics which are detailed in the following:

The World Construction Industry that is concerned about constructing real estate properties for both residential and commercial purposes are categorized under the group General Construction. Any type of building construction are categorized under this head. World Construction Industry that is involved in the production of specialized items in the real estate properties are categorized under Specialty trade section. World Construction Industry is also involved in building bridges, roads, etc.

Construction Industry Trends

Construction Industry Trends all over the world show a rise in its rate of growth. This industry is composed of many components including construction of heavy and civil engineering (highways, bridges, railway tracks, airports, etc.), real estate (both residential as well as commercial) development, and specialized construction products (such as architectural products, electrical connections, decorative items, etc.). All these segments cannot be expected to show similar trends and in fact are showing differential growth pattern all over the world.

Facts about Construction Industry Trends

 Construction industry contributes a huge chunk to the world GDP amounting to 1/10th of the same.

 This industry has immense potential in generating huge amount of employment. It has been found out that construction industry offers employment to around 7% of the total employed work force around the globe.

 Construction Industry is the largest sector in respect of consumption of energy. It consumes around 2/5th of the total consumed energy through out the world.

 Resource utilization in case of construction industry amounts to half of the total resource used all over the world.

The most significant aspect associated with the construction industry trends is increased use of the latest IT technologies for pacing up the work. Cutting edge technology is being adopted by world's one of the biggest industries for leveraging purposes and is mainly being used in raising the efficiency level of engineering and designing of construction industry. It has been found out that the paper oriented format of operation in the construction industry is not at all a cost effective approach because it eats around sixteen billion US dollars in US real estate sector only. Construction Industry Trends show that the utilization of information technology has helped the industry to save a lot of fund which could be channelized in more fruitful directions.

One of the latest technologies used in construction industry is Building Information Model (BIM). This technology helps all the factors of a project to work in a collaborative and concerted manner solely based on the platform of Information Technology. BIM helps the different members of a project to communicate information among themselves which consequently leverages the productivity and at the same time minimizes the error along with cost.

Construction Industry Trends can be stratified in accordance with the different segments and countries. We would mainly discuss about two countries for giving an overview of the construction industry trends.

 In USA, heavy engineering construction sector has increased at the rate of 5.2% in the financial year 2005. Residential and commercial residential real estate sector has respectively grown at the rate of 15% and 7.5%. But this upbeat mood lost its shine in the fiscals 2006 and 2007 especially in the residential real estate one. A glut can be evidenced in this segment because of fall in the sales of the homes which is expected to continue till 3rd quarter of 2007.

 India is seeing a boom in the construction sector mainly due to the government initiative in expansion of the developmental facilities. Economic upsurge has also generated enhanced generation of demand in the real estate sector (both residential as well as commercial). Construction Industry in India is rising at a phenomenal rate of 7 to 8% p.a.

Construction Industry Research

Industry Research is one of the most important ingredients required by the construction industry for proper analysis and viability of any project. The construction industry can be stratified into 3 broad categories:-

 Construction of heavy and civil engineering including construction of railway tracks, highways, etc.

 Construction of real estate buildings meant for both residential as well as commercial purposes.

 Construction of specialized items like architecture, pipelines, electrical equipments, etc.

Importance of Construction Industry Research

Generally, before the inception of any infrastructural project the agency or government department in charge of it requires thorough inspection of the same. The main aspects that need to be visited by the construction industry research include:

 Viability of the project involving both the cost as well as revenue aspects

 Choosing of the place or site where the construction needs to be done.

In case of construction of the real estate properties, the most important factor that are visited by the construction industry research involve:

 Costing structure involved in the construction of the building

 Expected revenue that the apartments are going to fetch for the builder along with the profit margin associated with each of the flats.

 The resale value of the home in the short, medium and long term.

Construction industry research in case of real estate sector becomes more important because of the fact that it involves investment opportunities for individuals. This market of residential real estate is subjected to risk and for that reason the investors are required to go through the Construction Industry Research report for making informed decision. This would help the investors in making profit out of the real estate investments.

Construction Industry Research of the US residential real estate market provide negative signals in the present context and expects the on going downtrend to continue till the 3rd quarter of the financial year 2007. This market is expected to be stabilized from the mid-year of 2008. The analysts go through the entire fundamental as well as the technical aspects of the market for reaching a conclusion and accordingly predicting its future movements.

Residential Construction Industry is especially concerned with the construction of homes required for residential purposes. These houses meant for personal occupancy come in varied forms, namely, single family occupancy type, duplex buildings, residential apartments in the form of flats, etc.

Residential Construction Industry involves two types of constructions:-

 Construction of the newly built houses for residential purposes.

 The already existing residential houses or apartments require repairing, modifications, and improvements for betterment of the same.

The growth rate of Residential Construction Industry is highly correlated with the economic growth of the economy. Economic growth makes people to migrate from the rural to urban areas for the search of a better. This phenomenon is glaring in China. At present, the Government of China is taking certain steps for cooling off the over-heated economy but the Residential Construction Industry is expected to grow at a far accelerated pace from the mid 2008. This prediction is done with much conviction by the analysts on the basis of the continuing strong performance of the economy along with high rate of migration of people from the country sides to the urban localities. This migration is creating increased need for their residence which is again increasing the propensity for Residential Construction Industry.

Currently, the construction of the dwelling houses are facing grave problem in United States of America. The main reason behind such a downturn lies in the over production and the consequent glut that has occurred in the residential real estate market. The situation has worsened due the fall in domestic demand for residential housing. The sales of the newly built houses have fallen significantly in United States and this trend is expected till the third quarter of 2007. From the last quarter of 2007, this trend in Residential Construction Industry is going to see a reversal and the market would stabilize around mid part of the financial year 2008.

In India Residential Construction Industry is going through a boom and is expected to continue for some time from now. But in the very recent past this industry has observed a partial slow down. The reason behind such a situation can be attributed to the decision of the Indian apex bank (Reserve Bank of India) to raise the interest rate of the housing loans. RBI has done this as a precautionary measure against the over-heating of the economy.

Commercial Construction Industry

Commercial Construction Industry is a booming market all over the world. At the time when the residential real estate market is going through a very bad phase, Commercial Construction Industry is constantly performing extraordinarily well.

In United States of America, this industry has observed a massive growth of around 12 % during the 2006 fiscal. Commercial construction industry in USA has grown at an enormous rate between the years 2005 and 2006. During this period, this industry has grown by five times which is itself is a phenomenal performance.

Experts have observed a peculiar phenomenon regarding the relation between residential and commercial real estate with that of the growth rate of the overall economy. They have found out that when an economy enters into a booming phase then the sector, which also observed a consequent boom, is the residential real estate market. But as this boom period enters its last phase in the business cycle then the acceleration in the housing market falls and the growth is seen in the Commercial Construction Industry. Thus, the analysts, economists and the experts of the Chicago Mercantile Exchange (CME) have come to a conclusion that during the first phase of the boom period the housing sector flourishes but with the passage of time this enthusiasm fizzes out and during the finishing lap of the boom period, the Commercial construction industry performs extraordinarily. The reason behind the last phase performance of this industry lies in the fact that commercial construction industry has a higher latent period than the housing market, that is, the commercial real estate market acts in a cautious manner to reap the advantage of economic boom. There are especially two main reasons that help the commercial construction industry for phenomenal performance and they are:-

 Impressive rate of growth of the domestic economy

 Rate of interest associated with the real estate loans need to be low

 Increased need for commercial for the industries like the IT industries

 Increased demand from the retail sector

 Increase in the corporate profit has led them towards expansion of business.

 Demand for warehousing increases with the increase in foreign trade which consequently expands the scope for commercial construction industry.

GE Real Estate is one of the largest companies in commercial construction industry in USA, Europe and Asia.

CHAPTER 3

CONSTRUCTION PROJECTS MANAGEMENT

In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of multitasking. Normally the job is managed by the project manager and supervised by the construction manager, design engineer, construction engineer or project architect.

For the successful execution of a project, effective planning is essential. Those involved with the design and execution of the infrastructure in question must consider the environmental impact of the job, the successful scheduling, budgeting, site safety, availability of materials, logistics, inconvenience to the public caused by construction delays, preparing tender documents, etc

Security in work is very important in any business however construction business doesn’t offer you lots of security but its sure that it will give you lots of money. Any construction entrepreneur will pay highly to its employee and have number of projects to get done but with involvement of “risk” factor. So the management of any construction project requires lots of skill As well as experience.

Experience is one of the major factors that are to be considered before recruiting any individual for any particular project. If the project is of high budget than definitely experience people will take over where as if the construction project is not that big than definitely trainee or people with less experience can work over it. Construction project management can be a team of engineers, architect, designers, management trainee etc.

Management people who have qualification of Business Administration helps Construction Company in getting clients and thus it helps company in growing business. However in today’s world more than presentation to client what works is contacts and money. But there are some clients who look only after quality of work and if a company think that the construction management team is efficient enough to deliver quality work than it will be client who will walk towards the company.

Project Management in construction can differ from projects to projects. Like if a construction is need to be done for a theme park than a team of creative people is needed, if a project is related to the building some mall than the team of project management will have more of civil engineers. But today every company manages projects with some specialization. Like a construction company can specialize only in building bungalow, sky capers, Malls, theatres, parks etc.

Construction project management team can also hire people from abroad if the need exist because only particular talented people can do that work. So the people who are hired are nothing

but the resources but while hiring it is to be seen that they will add value to the project in a very efficient way. Construction project management team just needs to see the demand of client and work accordingly but by putting some suggestion and ideas, which will benefit company as well as client.

In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of multitasking. Normally the job is managed by the project manager and supervised by the construction manager, design engineer, construction engineer or project architect.

For the successful execution of a project, effective planning is essential. Those involved with the design and execution of the infrastructure in question must consider the environmental impact of the job, the successful scheduling, budgeting, site safety, availability of materials, logistics, inconvenience to the public caused by construction delays, preparing tender documents, etc.

Types of Construction Projects

In general, there are three types of construction. Each type of construction project requires a unique team to plan, design, construct, and maintain the project.

Building Construction

Building construction is the process of adding structure to real property. The vast majority of building construction projects are small renovations, such as addition of a room, or renovation of a bathroom. Often, the owner of the property acts as laborer, paymaster, and design team for the entire project. However, all building construction projects include some elements in common - design, financial, and legal considerations. Many projects of varying sizes reach undesirable end results, such as structural collapse, cost overruns, and/or litigation reason; those with experience in the field make detailed plans and maintain careful oversight during the project to ensure a positive outcome. Building construction is procured privately or publicly utilizing various delivery methodologies, including hard bid, negotiated price, traditional, management contracting, construction management-at-risk, design & build and design-build bridging.

Residential construction practices, technologies, and resources must conform to local building authority regulations and codes of practice. Materials readily available in the area generally dictate the construction materials used (e.g. brick versus stone, versus timber). Cost of construction on a per square metre (or per square foot) basis for houses can vary dramatically based on site conditions,

local regulations, economies of scale (custom designed homes are always more expensive to build) and the availability of skilled tradespeople. As residential (as well as all other types of construction) can generate a lot of waste, careful planning again is needed here.

The most popular method of residential construction in the United States is wood framed construction. As efficiency codes have come into effect in recent years, new construction technologies and methods have emerged. University Construction Management departments are on the cutting edge of the newest methods of construction intended to improve efficiency, performance and reduce construction waste.

Building construction is the process of adding structure to real property. The vast majority of building construction projects is small renovations, such as addition of a room, or renovation of a bathroom. Often, the owner of the property acts as laborer, paymaster, and design team for the entire project. However, all building construction projects include some elements in common - design, financial, and legal considerations. Many projects of varying sizes reach undesirable end results, such as structural collapse, cost overruns, and/or litigation reason; those with experience in the field make detailed plans and maintain careful oversight during the project to ensure a positive outcome. Building construction is produced privately or publicly utilizing various delivery methodologies including hard-bid, negotiated price, traditional management-at-risk design build and design build bridging.

Industrial Construction

Industrial construction, though a relatively small part of the entire construction industry, is a very important component. Owners of these projects are usually large, for-profit, industrial corporations. These corporations can be found in such industries as medicine, petroleum, chemical, power generation, manufacturing, etc. Processes in these industries require highly specialized expertise in planning, design, and construction. As in building and heavy/highway construction, this type of construction requires a team of individuals to ensure a successful project.

Construction Processes

Design Team

In the modern industrialized world, construction usually involves the translation of paper or computer based designs into reality. A formal design team may be assembled to plan the physical proceedings, and to integrate those proceedings with the other parts. The design usually consists of

drawings and specifications, usually prepared by a design team including the client architects, interior designers, surveyors, civil engineers, cost engineers (or quantity surveyors), mechanical engineers, electrical engineers, structural engineers, and fire protection engineers. The design team is most commonly employed by (i.e. in contract with) the property owner. Under this system, once the design is completed by the design team, a number of construction companies or construction management companies may then be asked to make a bid for the work, either based directly on the design, or on the basis of drawings and a bill of quantities provided by a quantity surveyor. Following evaluation of bids, the owner will typically award a contract to the lowest responsible bidder.

The modern trend in design is toward integration of previously separated specialties, especially among large firms. In the past, architects, interior designers, engineers, developers, construction managers, and general contractors were more likely to be entirely separate companies, even in the larger firms. Presently, a firm that is nominally an "architecture" or "construction management" firm may have experts from all related fields as employees, or to have an associated company that provides each necessary skill. Thus, each such firm may offer itself as "one-stop shopping" for a construction project, from beginning to end. This is designated as a "design Build" contract where the contractor is given a performance specification, and must undertake the project from design to construction, while adhering to the performance specifications.

Several project structures can assist the owner in this integration, including design-build, partnering, and construction management. In general, each of these project structures allows the owner to integrate the services of architects, interior designers, engineers, and constructors throughout design and construction. In response, many companies are growing beyond traditional offerings of design or construction services alone, and are placing more emphasis on establishing relationships with other necessary participants through the design-build process.

The increasing complexity of construction projects creates the need for design professionals trained in all phases of the project's life-cycle and develop an appreciation of the building as an advanced technological system requiring close integration of many sub-systems and their individual components, including sustainability. Building engineering is an emerging discipline that attempts to meet this new challenge.

Financial Advisors

Many construction projects suffer from preventable financial problems. Underbids ask for too little money to complete the project. Cash flow problems exist when the present amount of funding cannot cover the current costs for labour and materials, and because they are a matter of having sufficient funds at a specific time, can arise even when the overall total is enough. Fraud is a problem in many fields, but is notoriously prevalent in the construction field. Financial planning for the project

is intended to ensure that a solid plan, with adequate safeguards and contingency plans, is in place before the project is started, and is required to ensure that the plan is properly executed over the life of the project.

Mortgage bankers, accountants, and cost engineers are likely participants in creating an overall plan for the financial management of the building construction project. The presence of the mortgage banker is highly likely even in relatively small projects, since the owner's equity in the property is the most obvious source of funding for a building project. Accountants act to study the expected monetary flow over the life of the project, and to monitor the payouts throughout the process. Cost engineers apply expertise to relate the work and materials involved to a proper valuation. Cost overruns with government projects have occurred when the contractor was able to identify change orders or changes in the project resulting in large increases in cost, which are not subject to competition by other firm as they have already been eliminated from consideration after the initial bid.

Large projects can involve highly complex financial plans. As portions of a project are completed, they may be sold, supplanting one lender or owner for another, while the logistical requirements of having the right trades and materials available for each stage of the building construction project carries forward. In many English speaking countries, but not the United States, projects typically use quantity surveyors.

Legal Considerations

A construction project must fit into the legal framework governing the property. These include governmental regulations on the use of property, and obligations that are created in the process of construction.

The project must adhere to zoning and building code requirements. Constructing a project that fails to adhere to codes will not benefit the owner. Some legal requirements come from malum in se considerations, or the desire to prevent things that are indisputably bad - bridge collapses or explosions. Other legal requirements come from malum prohibitum considerations, or things that are a matter of custom or expectation, such as isolating businesses to a business district and residences to a residential district. An attorney may seek changes or exemptions in the law governing the land where the building will be built, either by arguing that a rule is inapplicable (the bridge design won't collapse), or that the custom is no longer needed (acceptance of live-work spaces has grown in the community).

A construction project is a complex net of contracts and other legal obligations, each of which must be carefully considered. A contract is the exchange of a set of obligations between two or more parties, but it is not so simple a matter as trying to get the other side to agree to as much as possible

in exchange for as little as possible. The time element in construction means that a delay costs money, and in cases of bottlenecks, the delay can be extremely expensive. Thus, the contracts must be designed to ensure that each side is capable of performing the obligations set out. Contracts that set out clear expectations and clear paths to accomplishing those expectations are far more likely to result in the project flowing smoothly, whereas poorly drafted contracts lead to confusion and collapse.

Legal advisors in the beginning of a construction project seek to identify ambiguities and other potential sources of trouble in the contract structure, and to present options for preventing problems. Throughout the process of the project, they work to avoid and resolve conflicts that arise. In each case, the lawyer facilitates an exchange of obligations that matches the reality of the project.

Interaction of Expertise

Design, finance, and legal aspects overlap and interrelate. The design must be not only structurally sound and appropriate for the use and location, but must also be financially possible to build, and legal to use. The financial structure must accommodate the need for building the design provided, and must pay amounts that are legally owed. The legal structure must integrate the design into the surrounding legal framework, and enforces the financial consequences of the construction process.

Procurement

Procurement describes the merging of activities undertaken by the client to obtain a building. There are many different methods of construction procurement; however the three most common types of procurement are:

1. Traditional (Design-bid-build) 2. Design and Build

3. Management Contracting

Traditional

This is the most common method of construction procurement and is well established and recognized. In this arrangement, the architect or engineer acts as the project coordinator. His or her role is to design the works, prepare the specifications and produce construction drawings, administer the contract, tender the works, and manage the works from inception to completion. There are direct contractual links between the architect's client and the main contractor. Any subcontractor will have a direct contractual relationship with the main contractor.