Construction Engineering and Management Exam 2

CSI

Construction specifications institute

CSI format

16 major divisions in CSI format
- grouped by building trades and related broad scope sections
- provides the industry standard for cataloging design information

CSI divisions

1. general requirements
2. existing conditions
3. concrete
4. masonry

Unit price estimating main variables

- unit price cost
- construction equipment rental cost
- crew listing
- historical cost index
- city cost index
- location factor
- overhead and profit

CCI

Construction cost index

BCI

building cost index

labor productivity rate

- work per unit time or per other unit of x work hours per unit

quantity takeoff

required number of units (including weights)

work hours required

productivity rate (work hours per unit) * quantity takeoff

Duration

work hours required per crew size

activity labor cost

duration * hourly crew labor cost

steps to preparing detailed estimate

1. review scope of work
2. determine quantities of each type of work
3. determine cost of materials from vendors
4. determine cost of labor
5. determine cost of construction equipment
6. determine cost of specialty work
7. determine taxes, bonds, insurance and general and administrative overhead
8. determine project contingency
9. determine reasonable profit for your effort

Information needed for estimating

- project location
- probable weather condition
- access to site
- local regulations...

Lump-sum bid

- quantity survey totals and their units
- material unit prices and extensions
- labor unit prices and extensions
- equipment costs for entire project are computed separately

Unit price bid

one summary sheet per pay unit
- each summary sheet includes several different work categories
- includes columns for materials, labor, equipment and subcontracts

(why use) recap sheets

- organization
- summarize entire project on a single sheet
- find total cost by simple addition of component cost
- apply project mark-up: overhead, bonds, insurance, taxes, contingency and profit
- allow for easy adjustment

Unbalanced bidding

- applies to unit bonding
- front end loading
- owner may accept front-end loading if they feel it covers interest on money and legitimacy includes set up costs
- can take advantage of expected mistakes in owner's estimate

front-end loading

raises prices for items which occur early in the project and reduces prices for pay items that occur later in the project

Disadvantages of unbalanced bidding

- changes can't have an unrealistic impact on the pricing situation (GC can gain or lose)
- unrealistic unit prices can adversely affect the owner's or A/E's decision
- a bid may be rejected if through to be unfair or unresponsive

direct cost

- can be assigned directly to work items
- cause and effect relationship
- disappears if a work item is eliminated

Examples
- basic wages
- cost of GC's and subcontractors own forces
- cost of placing concrete slap
- cost of labor placing reinforced steel

indirect cost

- can be assigned indirectly to work items
- still remains if a work item is eliminated

Examples
- payroll taxes and insurance
- project overhead
- field supervision
- services
- office trailers
- tower crane

owning costs

- indirect costs
- depreciation, interest costs, insurance, taxes

operating costs

- direct costs
- fuel, lubricant, tires, repairs, special items, operator's wages

allowances

A/E designates a fixed amount to be included in the contractor's bid to cover cost or certain materials that has yet to be specified
- actual selection of materials will occur as needed during a project

pre-qualification

requires only contractors deemed capable obtain bidding docs, submit proposals or enter into contract
- evaluation process that must be completed for the GC to receive the bidding docs

post-qualification

- evaluation process that happens after a GC's bid is submitted

responsive bid

do the work exactly as specified in the bidding docs

acceptable period

time period in which a GC can w/draw w/o losing his/her bid bond (30-60days)

rejection of bids

bids over 10% of engineer's estimate can be rejected

complimentary bid

Bid process associated with knowing the submission of bids higher than the bid of another firm, any intentionally high or noncompetitive bid, and any other form of bid submitted for the purpose of giving a false appearance of competition

mistakes in bid

Doctrine of unilateral mistake allows GC to legally withdraw bid if
the mistake is:
• So major that if enforcing the contract would be “impossible”
• Mistake relates to material feature of contract (having real importance or great consequence)
• Mistake not from violation of a positive legal duty or “blameful” negligence

Excusable mistakes in bids

- calculation error, transaction error, unintentional omission
- GC is notified to correct the mistake promptly

inexcusable mistakes in bids

errors in judgements, not visiting site, incorrect rough estimate, if GC verified bid and starts work

promissory estoppel

low-bidding GC bases bid on a considerable lower subcontract bid
- subcontractor is prevented from withdrawing bid

Pre-Construction planning

- inputs from all groups involved
- financial planning
- permits and regulations
- scope definition

Construction contract

-realistic obligations
- risk identification, allocation
- adequacy of technical plans
- formal dispute resolution process
- operating procedures

external influences on project success

- environmental issues, public interference, site limitations, remoteness, availability of capable craftsmen/subC

internal influences on project success

- pioneer project, design complexity, construction complexity, size

elements of construction contracts

- agreement, drawings, specifications, general conditions, addenda, process for change orders

tort liability

- breach of duty imposed by law
- Distinct from a contractual or criminal wrong
• Types: Negligence and fraud
• Example: Do not risk injury to people
• Engineers can be personally liable

contract liability

Breach of written/oral agreement
• Terms of other contracts are incorporated and
presumed to be known

contract documents

- defective plans and specifications
- spearin doctrine: owner liable to contractor

negligent misinterpretation

• Contractor can sue engineer
• When a professional performs his/her duties
improperly out of ignorance or carelessness

inproporation clause

• Subcontractor is obligated to the GC to the fullest extent that the GC is obligated under the Contract
• Subcontractor acknowledges that it has familiarized itself with all terms in the Contract

merger clause

This contract constitutes the entire agreement between the parties and it supersedes all prior negotiations, representations, or agreements, whether written or oral

indemnity

protection against future loss

hold harmless

- assure that other party isn't to blame and will not be blamed by yourself for your own wrongdoing

pre-construction conference

• Owner, designer, GC, engineer, subcontractors, utility companies and others
• Technical detail, products “or equals”
• Pay estimates, communication protocols

submittals

drawings or sample from designer/fabricator that assures that product complies with intent/heal communication

RFI

request for information, clarifies designer's intent

change orders

Scope and detail not defined in contract
• Changed by the owner to create extra work that needs to be compensated

documentation

Written: Letters, memos, reports, meeting minutes, email
• Non-written: Meetings, phone conversations, drawings, sketches and photos

Dispute resolution steps

- prevention
- negotiation
- standing neutral
- non-binding resolution
- binding resolution
- litigation

litigation

a legal proceeding in a court; a judicial contest to determine and enforce legal rights

arbitration

the hearing and determination of a dispute by an impartial referee agreed to by both parties

mediation

a negotiation to resolve differences that is conducted by some impartial party

what causes contractor failure

- rapid overexpansion
- changes in line of word, scope of work or territory
- lack of comprehensive business plan
- poor financial controls
- subcontractor failure
- failures of communication

surety bonds

offers assurances to the owner of a construction project that the general contractor will perform the work specified in the contract and pay certain subcontractors and suppliers

benefits of surety bonds

- increase the number of projects for which a contractor can qualify
- ensures payment protection for subcontractors, suppliers and laborers
- technical, managerial, or financial assistance can be made available in certain circumstances

federal surety bond

- heart act and miller act
- require performance and payment bonds for public works contracts in excess of $100,000

state and local surety bonds

- little miller acts
- require performance and payment bonds for state and local public works projects (vary by state)

who requires bonding

Private owners
- capable contractor
- protection for contractor default
- mitigate lien exposure

Lending institutions
- protect lending capital
- provide assurance of project completion

GCs
- protection against subcon default

Principles of contract surety

three party agreement
-surety company
- owner
- general contractor

aspects of surety bonding
- can require prequalification
- stipulates contract completion
- requires payment to subcontractors and suppliers

prequalification

- provides in-depth look at the contractor's entire business operation
- determines the contractor's ability to meet current and future contractual and financial obligations
Assures that the bonded company:
- is well-managed, sound enterprise
- maintains fair business practices
- performs obligations as agreed

The three C's of underwriting

- capacity: knowledge, experience, equipment and planning abilities
- Capital: ability to finance the project in conjunction with other projects in the work program
- character: experience and reputation in fulfilling promises and obligations

capacity

- historical performance of the company
- organization structure and reporting
- resumes of the GC and key personnel
- tools and equipment
- analysis of past, current, and future projects

capital

- detailed financial statements
- contract schedules
- accounting and cost records
- profitability trends
- cash flow projections
- credit references
- personal and corporate

character

- reputation as a sound, reputable business person
- organizational structure
- deals fairly with project owners, subcontractors, suppliers, lenders and other creditors

types of surety bonds

- bid bond
- performance bond
- payment bond

bid bond

assures owner that GC will enter into the contract at the price bid and provide the required performance and payment bonds

performance bond

assures that the GC will perform the contract
- on time
- on budget
- according to specification
- free of defective workmanship and materials within one year of completion

payment bond

- assures owner that GC will pay selected laborer, subcontractors and suppliers associated with the project

If GC defaults...

- re-bid the job for completion
- arrange for replacement contractor
- retain original GC
- reimburse owner as required by the bond

legends

- list of symbols used to identify the features in the drawing
- every symbol and line type used in the drawing will have corresponding entry

types of lines

- property lines, border lines, object lines, hidden lines, center lines

dimension lines and extension lines

- marking device placed at end of dimension line
- arrows, dots, ticks
- extension lines are drawn to specify features to which the dimension applies, perp to dimension lines

break lines

cutting plane lines

blueprint view types

- plan views
- orthographic/perspective
- detail views
- contour/topographic views
-cross-section
- plot plans
- profiles

orthographic views/drawings

- most construction drawings use orthographic drawings
- projected at rights angles
- more details can be shown
- draw to true size or scale

perspective view

- more realistic
- receding lines meet a vanishing points

detail view

• Certain features cannot always be clearly shown on construction drawings
• Large scale illustration to show all details
• May be shown on same sheet as the plan or
elevation views or on separate sheets

plot plans

• View from above the property that illustrates location of
building on the lot
• Lot and block number of address
• Bearing and length of property lines
• North arrow
• Dimensions of front, rear and side yards
• Location of other accessory buildings
• Location of walks, drivers, fences, etc.

drawing scales

- architectural scale (1/4)" = 1'
- engineering scale 1"=10'
- metric scale 1cm=50cm

quantity take-off

• Quantities derived from drawings
• List of all construction resources (materials, equipment and labor)
• Includes element description, quantity value and quantity units
• Accurate quantity takeoffs are required for detailed cost estimates

foundation plans

• Details of construction for the footings and foundation walls
• Footings and walls must be carefully placed, as the rest of the building relies on their accuracy
• Slab-on-grade is a concrete slab placed directly on the subgrade (basement floors and main floors)

easements

- measurement to the side of the centerline
- used for utilities, right-of-way and other elements

profile view

• Shows vertical alignment/curves of highway
• Not symmetrical (different grades on each side) Vertically exaggerated scale
• Contains station numbers
• Elevations
• Shows existing and finished grade

structural steel

- widely used
- hot steel runs through a succession of rollers to create steel sections, shapes and plates
- available in many shapes and sizes

WWF

- prefabricated material used in concrete floors, slabs and pipes
- consists of a mesh of steel wires welded together