Project Management UGA: Midterm

Site Finding

The process of identifying a location for a project, including specific needs like drainage and accessibility.

Preliminary Work

The initial steps undertaken to gather background information and prepare a site for construction.

Letter of Transmittal

A cover letter giving an overview of submitted documents, including purpose, recipient, and date.

Two Page Memo

A document summarizing background information about a site and relevant properties, formatted in two single-spaced pages.

Industry Sectors

Publicly Funded (36%)

Privately Funded (64%)

• Commercial (28%)

• Residential (31%)

• Industrial (6%)

• Heavy Engineering (35%)

Commercial Sector

A construction sector that includes office buildings, malls, and schools, typically funded privately with some public investment.

• Includes office buildings,large apartment complexes, shopping malls, theatres, etc 

• Tend to be privately funded with some public funding for schools and hospitals 

• Typically designed by architects with support from engineers and constructed by general contractions that manage the project 

• More technology and larger capital than in the residential sector 

• Many companies will develop a construction specialty 

• Accounts for about ¼ of the construction market

Residential Sector

A construction sector focusing on individual homes and small apartments, mostly funded by private owners.

• Individual homes small condos and small apartment complexes

• Projects are privately funded by individual owners for their own use 

• Typically designed by an architect (not always) with support from structural/geotechnical 

• Most components of this constriction are built on-site 

• Fairly low level of technology 

• In a good economy, about ½ of construction spending takes place in the residential sector

Industrial Sector

Construction sector dealing with facilities like refineries and power plants, generally privately funded and specialized.

• Steel mills, petroleum refineries, chemical processing plants, power plants, and automobile producing facilities 

• The design and construction depends on the needs of the process or production equipment 

• Generally privately funded 

• Lots of specialities, so there are fewer companies working in this area 

• A lot of repair work from jobsite errors

Heavy Engineering

A construction sector dealing with infrastructure like roads and bridges, primarily publicly funded.

• Enables the distribution of goods and people (roadways, bridges, dams, canals)

• Designed by civil engineers and built by specialized construction contractors 

• Much fewer companies (companies tend to be very large)

• Most are publicly funded as they serve the public's needs (Taxes)

• Currently this area requires more attention 

  • Bridges typically designed for 50 years, Average US bridge age is 43 years 

  • Most cities are relying on water distribution systems built prior to WW1

Construction management (Little m)

The planning, coordination, and control of a project from start to finish.

Construction Management (Big M)

the organizing and directing of in individuals, materials, and equipment to accomplish the purpose of the designer

(Two different types of construction management big M and little m)

• More than the act of building. Addresses how resources can be best applied to complete a project 

• Four M’s of Construction Resources: Manpower, Machines, Materials, Money, as well as timeTypes of Industry

Types of Industry

• The construction industry is a service industry that’s success is dependent upon people rather than on its technology or product 

• The industry is cyclical (abundance of projects and slow periods)

• Demand depends on factors such as government funding demographics and market trends —weather dependent

• A lot of construction is custom (not mass produced)

Demographic/Trends

• Employment is expected to rise 19% in the next 10 years 

  • Demand for commercial construction and increase in road, bridges and other infrastructure related projects 

• Aging workforce being replaced with younger individuals

• Need a diverse workforce 

• The population is living longer 

  • Leads to more assisted living facilities and health care facilities 

  • Retirement communities needed

Technology

• Using information and computing technology to manage projects bridging the office and job-site 

• Computer Aided Design (CAD) used to design and view two and three dimensional components of buildings 

• building Information Modeling (BIM)- a three dimensional modeling program that enables visualization of the project 

• Lidar, scanning

Management Levels

• Hierarchical 

  • Organizational- concerned with the legal and business structure 

  • Project 

  • Activity 

  • Operation 

  • Process 

  • Work Task 

• In the higher up tasks it is more about managing projects and physical components of the project 

• As you get lower you get closer to the field work and day to day actions, and individual tasks

Opportunities

• Domestically one of the greatest opportunities for construction is in infrastructure: bridges, roadways, tunnels, airports 

• Need rehabilitation and or replacement 

• US Department of Transportation estimates the need for roads and bridges $64.1 billion 

• Sustainability

Why do we need an Organization Structure?

• Construction and civil engineering are normally project based

• Clear accountability 

• Efficient use of resources and time 

• Faster decision making 

• Reduce conflicts

Two types of organizational structures (mix or both)

• Centralized

• Decentralized

• Could be a mix of both

Centralized

• When decision making is concentrated at the top level such as the CEO and the President 

• Typically smaller consulting firms

  Pros: reduce conflicts, everyone knows there job under the CEO

  Cons: the CEO could get to busy or making the wrong decisions

Decentralized

• Decision-making authority is distributed across individual teams 

• As firm grows bigger it becomes more decentralized (not all decisions made by the president)

Pros: can be faster in decision making, less bureaucratic, big commercial construction

Organizational Chart

• Genralist

• Departmental

• Matric

Generalist

• the most basic

  • People and employees are grouped together in general and broad groups such as managing directors, production manager, plant superintendent, and then foreman shops answering to each other 

Departmental

• complex

  • Will have different departments and it will show how everything works (much larger firm)

Matrix

• most complex

  • Will show department to department interactions and who might work with who, shows the interconnections 

  • Will have to answer to the department head, and also the project manager of that project, so if you working on multiple projects you will have to work with multiple project managers

Legal forms of Organization

• sole proprietorship

• Partnership

• Corporation

Sole Proprietorship

• Single-person ownership, working for themselves

• May have many employees, but only one person that is in control 

• Can be started and ended without any documentation

• Can be high risk

• Pay for all equipment

Partnership

• Must be at least two people to be legal, percentage of ownership may vary 

• Have to pay for everything together 

• All debts by the company are responsible by partners

• Will dissolve according to a prior agreement 

• How to split company if the company dissolves

Corporation

• Stockholders are only liable up to the amount they have invested in the company 

• If it wants to raise capitol it can sell stocks

• Construction companies generally only have a few people that have stocks in the company 

• Decisions on stock are made by people who already own stocks 

• Slower decision making process in the firm

Delivery Methods

• Represent how the projects is designed, engineered and constructed 

• Determines how stakeholders will work together throughout the project

  • Design Bid Build

  • Construction Manager at Risk (CMAR)

Design-Bid-Build

• Owner hires a design professional 

• Developed design and contract documents 

• Pay a fee that is either a percent of overall cost or lump sum 

• Owner gets bid or negotiates with a specific contractor 

• Contractor is then responsible for completing the project according to the contract documents 

  • Contractor may use in house employees or subs to complete work 

• The owner hires a firm to perform the design and construction throughout the life of the project.

• Can be a single company that offers both services

• Can be a joint venture that come together to perform a single project

• In either case, each can hire subcontractors to perform the work in the field

Construction Manager at Risk (CMAR)

• The owner hires a design firm and constructed project management firm in the beginning 

• Theres is a commitment by th construction manager to deliver the project within a GMP (Maximum Price)

• Construction Manager acts as a consultant to the owner in the development and design

Contract Types

• Single Fixed Price (Lump Sum)

• Unit Price

• Cost Plus Fee

Single Fixed Price (Lump Sum)

• The contractor agrees to provide a specified amount of work for a specific sum 

• Both sides to fix the conditions of the project precisely, because after the contract is signed, both parties must live with its terms 

Pros: 

• The owner knows before the work begins what the final cost will be 

• Typically used with a design bid build method 

• The designer creates contracts that the owner will bid or negotiate 

Cons:

• The contract is only as good as the contract documents 

• If the project changes or errors exist in the control documents then the contract has to be renegotiated

Unit Price

• The owner and contractor agree on the price that will be charged per unit for the major elements of the project

• The owner estimates quantities for the project. The contract will be a total price based on these quantities.

• Contractor overhead, profit, and other project expenses must be included in the unit prices.

Pros:

• Sometimes difficult to accurately quantify the work necessary 

• Designer estimates the quantities and the bidders provide a unit price for each task 

Cons: 

• If actual quantities are significantly different, the owner's financial commitment may be greater than planned 

• Possible for unbalanced bids (ethical?)

• Some quantities measure in the field 

Cost Plus Fee

• Contractor is reimbursed by the owner for his work costs and receives an additional agreed upon fee or percentage of the costs 

• The owner must be clear what costs will be reimbursed and which costs will be covered by the fee 

Pros:

• This type of contract is beneficial when the scope of the project is difficult to define or when fast track construction 

• Contractor can start work faster because he knows prices will be reimbursed 

Cons: 

• Project begins with unknowns even when contract is stated 

• The project costs may be capped, but quality and scope may be sacrificed at the expense (work is not as great of quality just so they can make the budget)

Contract Changes

In each contract:

• An agreement is established

• The contract is entered into after the work to be performed has been estimated and a work plan developed

• A bid may be submitted or negotiations may occur If conditions change, the contract may have to change:

  • The scope of the project increases or decreases because of a change in owner requirements

  • The work must be performed differently because of conditions unforeseen when the contract was agreed to.

  • The design must be adjusted because of omissions in the documents or design features can’t be built as specified.

Four M’s of Construction Resources

Manpower, Machines, Materials, and Money utilized in construction projects.

Cyclical Industry

An industry characterized by alternating periods of high and low demand.

Organizational Structure

A system defining the hierarchy and roles within a construction management organization.

Project Life Cycle

1. Idea: combined with money to create a project

2. Project: is formed through drawings and specifications

3. Complete Facility: occupy and maintain a space and repair as it ages

4. Demolish or Renovate: End of life can no longer be used

Feasibility Analysis

• before deciding to invest an investor wants to be sure that they will have a return on there investment

• owner works with the architects and construction to gain advice on the design

Financing

• most investors do not fund 100% of the investment

  • acquires outside funding from other developers and banks

• Investors will decide to invest based on what return they want to see

Design of the Project

• if the owner decides to proceed they hire a design team and a contractor

• the design is divided into stages so the owner can see progress

  • Programming

  • Schematics

  • Design Development

  • Construction Documents

Programming

a concise written project objective matching the owners budget

Schematic

An investigation of different design alternatives

Design Development

a continuous and refinement of selected design

Construction Documents

The preparation of final documents used to describe work, engineering drawings , work as it will actually be constructed

Procurement

• finding and purchasing the materials required

• owner finds construction company and subcontractors are found by construction team

Construction

the main element involved in the construction is the task of managing field operations, scheduling crews

• controlling changes in scope

• accounting for payments

• financial control

• maintaining work schedules

• keeping track of contract documents

• monitoring quality control

Turnover and Setup

• the project is turned over to the owner for use during the rest of economic life

• certificates of warranty need to be collected

• changes in construction must be documented

Operation of the Facility

• phase is the responsibility of the owner

• building is used as owner intended

Disposal of Facility

At the end of its useful life, a project or facility can be:

• Closed down or abandoned

• Disassembled or removed

• Renovated or overhauled