INTRODUCTION TO CONSTRUCTION AND PROJECT MANAGEMENT

1. PRESENTED BY:
GROUP 1
ACOSTA, JAMIE CHRISTINE MINAY, MARY ROSE S.
DELA ROSA, ADRIAN R. MORAL, AZIL
FABELLA, RONALIZA S. TURLA, KAILA MARIE JOY D.R.

2. PRESENTED BY:
MORAL, AZIL
TURLA, KAILA MARIE JOY
Introduction to Construction
Industry

4. Construction Project Management:
o the overall planning,
coordination, and
control of a project
from beginning to
completion

5. Project Owner/ Client
Designer
Contractors
Construction Model

6. Owner – Contractor Hierarchy

7. PROJECT MANAGER
the individual charged with the
overall coordination of the
entire construction program
for the owner

8. Construction Project Management Participants
DIRECT
PARTICIPANTS
• CLIENT/
PROJECT
OWNER
• DESIGNER
• ARCHITECT
• ENGINEER
• CONTRACTOR
• GENERAL
CONTRACTOR
• SUB-
CONTRACTOR
INDIRECT
PARTICIPANTS
• AUTHORITIES
• PUBLIC
SERVICES
• FINANCING
ORG
• INSURANCE
COMP
EXTERNAL
• MEDIA
• PUBLIC

9. The functions of Construction management typically include
the following:
• OBJECTIVES
• BUDGET
• SCHEDULES
SPECIFY
• LABOUR
• MATERIALS
• EQUIPMENT
MAXIMIZE
• CONTROL
• COORDINATION
IMPLEMENT
• COMMUNICATION
• MECHANISMS FOR RESOLVING CONFLICTS
DEVELOP

10. Common Types of Construction
• Houses, apartments, condo, etc. residential
• Schools, banks, hospitals, etc. commercial
• railroads, airports, roads, etc. heavy civil
• plants, mills, refineries, etc. industrial
• sewer, waste management, etc. environmental

11. Market
Demands or
Perceived
Needs
Conceptual
Planning and
Feasibility
Study
Design and
Engineering
Procurement
Construction
Start-up for
Occupancy
Operation and
Maintenance
Disposal of
Facility

12. Main Phases of Construction
Preconstruction Procurement
Closeout
Construction

13. Critical issues facing construction
in this new millennium

14. Environmental Protections

16. Information Technology
Computer Aided Drafting
Optimized systems and
facilities

17. Human resources – the changing workforce

18. productivity
o monitor and check the
construction’s progress
• Diaries
• Logs
• Daily Field
reports
Keep
track
using:

19. Things Impacting Productivity

20. Cheetos

21. Quality control
- procedures
used to
determine if
completed
items meet
the required
quality.
-“Do it
right, and
do it right
the first
time”
-a primary
objective for
all the
members of
a project
team.
Quality
requirement
s - clear and
verifiable.

22. The Deming business philosophy
embraced 14 points, some that apply
to the construction industry are:
Strive to
improve
every
process.
Institute
training
on the job.
Demand
zero
defects.
Encourage
education.
Permit
and
display
pride in
one’s
work.

23. Project delivery systems
-The cost of
design and
construction is a
key concern of all
parties.
-Avoidance of
disputes between
owners, design
consultants, and
contractors
continues to be a
prime objective of
all parties
-Design-build
seems to address
speed of delivery
when including
both design and
construction time.

24. Project Delivery
compliance
w/
procurement
statutes
complexity
of building
time to
build
facility
Budget
Constraints
Risk

25. The Organization
Of the reported
880,000-plus general
contractors operating
in the United States
according to the 2004
Census, overwhelming
majority remain small
businesses with modest
annual volumes,
operating in a limited
geographic area.

26. Construction Technology
o -allows you to learn about
construction management and acquire
skills in the engineering of
construction.
o -can also mean the sum total of
processes for product and procedural
improvement in the industry of
construction.

27. Safety
- number one priority
-influenced in large part by decisions made during
the planning and design process.
Project managers and project superintendents will
need to concentrate their safety program on these
trades

28. The changing marketplace
-Tomorrow’s managers will have to become more astute and
selective.
The changing
role of the
general
contractor.
The project
manager’s role.

30. Keep the following guidelines in mind:
Build a project team.
Develop relationships with the owners
Protect your team
A promise made is a promise kept.
Keep track of things that went well and those that
didn’t.

31. Coordination is an ongoing activity.
Collaborate
Listen
Look at each project a new learning experience
Expect the unexpected

32. SAFETY

33. PRESENTED BY:
ACOSTA, JAMIE CHRISTINE
FABELLA, RONALIZA
Start of the Construction Process

34. letter of intent
is typically used to describe
a letter from an
employer to a contractor
(or from a main
contractor to a
subcontractor) indicating
the employer's intention
to enter into a formal
written contract for
works described in the
letter, and asking the
contractor to begin those
works before the formal
contract is executed.

35. A letter of intent must be specific in nature
Scope of
work
Lump sum,
or “cost
not to
exceed”
Money
value of
the work
Payment
terms
Time
frame
letter of intent Contents:

36. …continuation
Set out
matters to be
resolved
Restriction on
subcontracts
or purchase
orders
Termination
clause
signed and
dated by all
concerned
parties
letter of intent Contents:

37. Defining costs in the letter of intent
Scope of work, tasks, and reimbursable
included in letters of intent
in-house costs incurred by the general
contractor for estimating, accounting,
and even interim project management
and superintendent salaries.

38. Defining costs in the letter of intent
o Segregated costs associated with the
work performed under the letter of
intent are generally applied against
the costs for the total project, when a
formal construction contract is issued

39. Subcontractor commitments via LOI
o While operating under the terms and conditions of the letter of
intent, the general contractor may have to make certain
commitments to subcontractors and vendors, and any purchase
orders or subcontract agreement between the general
contractor and owner.

40. The letter of intent termination clause
o Any such termination clause should be
included in all vendor purchase orders or
subcontractor agreements.
o It is important that the project manager
notify all vendors and subcontractors
promptly, both verbally and in writing,
upon receipt of any termination notice
issued by the owner.

41. Prevalent Types of
Construction Contracts

42. PREVALENT TYPES OF THE CONSTRUCTION CONTRACTS
GENERAL CATEGORIES
Cost of the work plus a fee
The Stipulated or Lump-Sum Contract
The Cost-plus-a-fee with a GMP Contract
Construction Manager Contract
Design-build

43. PREVALENT TYPES OF THE CONSTRUCTION CONTRACTS
Less frequently used contracts between owners and general contractors:
Turnkey Contracts
Build-Operate-Transfer
Contracts with Government Agencies

44. Cost of the work plus fee
is a contract
agreement wherein
the purchaser
agrees to pay the
cost of the work,
including all trade
contractor work,
labor, materials, and
equipment, plus an
amount for
contractor overhead
and profit.

45. Cost of the work plus a fee
used when budget is
being restricted or when
there is a high
probability that actual
cost might be reduced.
preferred when there is
no enough data to
perform a
detailed estimate of the
work, or when the
design is not completed.

46. Cost to be reimbursed:
Wages
Labor costs
Taxes
Subcontract costs
Cost of materials and equipment
incorporated in the completed
project.

47. …continuation
Cost of other materials and equipment, temporary facilities,
and related items fully consumed in the performance of the
work.
Rental costs for temporary facilities, machinery, equipment,
and hand tools
Cost of removal of debris from the site
Cost of document reproduction, faxed and telephone calls,
postage, parcel post, and reasonable petty-cash
disbursements.

48. …continuation:
Travel expenses by the contractor while discharging
duties connected with work.
Cost of materials and equipment suitably stored offsite.
Portion of insurance and bond premiums.
Sales and use taxes.
Fees – assessments for building permits and other related
permits.
Fees for laboratory tests.

49. …Continuation
Royalties – license fees for use of a particular
design, process, or product.
Cost of electronic equipment and software
directly related to the work, with the owner’s
prior approval.

50. …Continuation
Legal, mediation, and arbitration costs, including attorney’s
fees
Cost to repair damaged or nonconforming work if that
damaged or nonconforming work was not caused by
negligence or failure to fulfill a specific responsibility of the
contractor

51. Salaries and other compensation of the contractor’s personnel
stationed at the contractor’s principal office or offices.
Expenses of the contractor’s principal office.
Overhead and general expenses.

52. …Continuation
The contractor’s capital expenses.
Costs due to negligence of contractor, subcontractor or supplier.
Any costs not specifically included in costs to be reimbursed.
Costs, other than approved change orders, that would cause the
GMP price to be exceeded.

53. Five critical elements in a cost-plus-fee contract

54. The Stipulated or Lump-Sum
Contract
• Most frequently used in
competitive bid work in
either public or private
sector

55. Related Problems
• The problems of defining scope
• Allowances and alternates in the
stipulated-sum contract
• Lump-sum contract pitfalls

56. Costs to be included in developing the
total cost of the allowance
Cost of materials and equipments
Cost of unloading and handling at the site, plus
installation costs
Overhead and profit

57. What are alternates?
Generally items
that may be added
to the contract
scope at a
predetermined
cost

59. The Cost-Plus-a-Fee with GMP Contract
GMP – Guaranteed
Maximum Price
This contract is frequently used
because it allows the owner to
gain the protection of the
maximum cost of construction
while retaining the potential for
cost savings

60. Important in Cost-plus-Fee with
GMP Contract
The importance of the contract qualification statement
Fees and Savings
Cost certification provisions
Awarding Subcontract agreements
Change orders and value engineering
Value engineering

61. Construction
Manager (CM)
Contracts

62. CM Contracts have gained much
popularity for several reasons
The CM concept allows an owner to engage a
construction professional to work with their design team
It essentially provides an owner with an arm’s length
management team

64. Predesign
Phase
Design
Phase
Construction
Phase
Preconstruction
Phase of
Contract

65. Program Manager

66. Applies
construction
management to
large, complex, or
multiple projects
May be required
to assist in
securing financing
of the project
Provide staff as
the project
progresses
through design
where they will
use their
experience
Program Manager

67. One of the key
elements of
program
management
Defines the vision,
implementation,
schedule, budget,
policies, and
procedures for
the project
Becomes the
master plan
serving as the
organization’s
formal process
Program Management Plan (PMP)

68. The Joint Venture Agreement

69. Two Basic Types of Joint Ventures
•A 50/50 Split whereby risk is
spread between the two parties
•A JV where one contractor
becomes the figurehead
Joint Venture Agreement

70. Turnkey
Contracts

71. Turnkey Contracts
o Often associated with
the process
engineering industry in
the design and
construction of
petrochemical and
chemical plants

72. Build-Operate-Transfer (BOT)

73. Build-Operate-Transfer (BOT)

74. Contracts with
Government
Agencies

75. Contracts w/ Government Agencies
Local, state, and federal
public agencies have
contract forms that
sometimes borrow
heavily from those of
the AIA

76. The Davis-Bacon Act
Requires payment of
prevailing wage rates
established for specific
geographic areas of
the country by the
Department of Labor

77. The Contract Work Hours and
Safety Standards Acts (CWHSSA)
o Requires the contractor to pay time
and a half for overtime hours

78. o Also known as Anti-Kickback Act
o makes it a crime for anyone to
require a labor or mechanic
employed on a federal of
federally assisted project to
kickback any part of their
wages

79. o Minimum hourly rates for skilled and
unskilled labor should be established
and included in the contract
documents
o Certifications, following the Davis-
Bacon Act, must be strictly followed
since falsification is a violation of
federal law

80. PRESENTED BY:
DELA ROSA, ADRIAN R.
MINAY, MARY ROSE S.
THE GENERAL CONDITIONS
TO THE CONSTRUCTION
CONTRACT
THE GENERAL CONDITIONS TO THE
CONSTRUCTION CONTRACT

81. ARTICLE 1 : GENERAL PROVISIONS
SECTION 1.1.2 THE CONTRACT
• A contractual relationship exists only
between the owner and the architect.

82. SECTION 1.1.7 INSTRUMENTS OF SERVICE
• Instruments of service is defined as plans,
specifications, surveys, models, and sketches.
SECTION1.1.8 INITIAL DECISION MAKER
• Is defined in the contract as someone who will
render an initial decision when a claim is presented

83. SECTION 1.5 OWNERSHIP AND USE OF DRAWINGS,
SPECIFICATIONS AND OTHER INSTRUMENTS OF
SERVICE
Technological advances, such as computer aided design, have and
will continue to have an impact on the architect’s services and the
manner in which they are provided.

84. SECTION 1.6 TRANSMISSION OF DATA IN
DIGITAL FORM
They shall endeavor to establish necessary protocols governing such
transmissions, unless otherwise already provide in the agreement or the
contract documents.

85. ARTICLE 2: OWNER
The owner is the person or entity identified as such in the agreement
and is referred to throughout the contract documents as if singular in
number.

86. ARTICLE 3 : CONTRACTOR
This article defines the role of the general contractor. It deals with
the topics ranging from shop drawings to the review of field
conditions, supervision procedures, concealed conditions,
allowances, and so forth;

87. ARTICLE 4 : ARCHITECT
Divided into three sections:
• General
• Administration of the contract
• Communications facilitating contract
administration

88. ARTICLE 5: SUBCONTRACTORS
•A subcontractor is a person or entity who has a direct contract
with the contractor to perform a portion of the work of the site.
•The term “subcontractor” does not include a separate contractor
or subcontractors of a separate contractor.

89. ARTICLE 6: CONSTRUCTION BY OWNER
OR BY SEPARATE CONTRACTORS
OWNER’S RIGHT TO PERFORM CONSTRUCTION AND TO
AWARD SEPARATE CONTRACTS
On some projects, the owner may retain multiple
contractors, each of whom will perform a separate scope
of work.

90. ARTICLE 7: CHANGES IN THE WORK
Changes in the work may be accomplished after execution of the
contract, and without invalidating the contract, by change order,
construction change directive or order for a minor change in the
work, subject to the limitations stated in this article and
elsewhere in the contract documents.

91. ARTICLE 8: TIME
The contract time starts to run as of date specified in the owner-
contractor agreement, whether or not the contractor begins
work on that date

92. ARTICLE 9: Payment and Completion
The contractor is directed to submit a schedule of values for
approval by the architect prior to the submission of the first
application for payment
This article stipulates that payment is allowed for the onsite
storage of materials and equipment, but any request for offsite
storage payment must be made to the architect in writing

93. • A presentation of a procedure by the general contractor
to insure that the title to the materials/equipment will pass
to the owner
• Evidence is presented that the cost of storage, materials
and transportation to the site will be paid by the
contractor
• Certificate is furnished which documents that coverage will
remain in effect during storage and transportation to the
site
Generally, the following conditions are required to be met
when requesting payment for offsite stored materials or
equipment:

94. • Conditions that permit the architect to withhold certification for
payment on the monthly requisition:
Decisions to Withhold Certification
If defective work has not been repaired or
replaced
If the contractor fails to make payments to the
subcontractor
If reasonable evidence exists that the project will
not be completed within the contract time
If the contractor consistently fails to perform the
work in accordance with the contract documents

95. • Provision whereby the subcontractor would be
paid after the contractor received payment
from the owner
“Pay when Paid”
• It marks the time when the contractor turns
over the cost of operating the building’s
utilities
Certificate of Substantial

96. ARTICLE 10: Protection of Persons and Property
This article requires the owner to advise the contractor of the
absence or presence of any hazardous materials likely to be
encountered on the site

97. ARTICLE 11: Insurance and Bonds
In conjunction with specific limits of insurance contained in the bid
documents, Article 11 provides more detail about insurance
coverage

98. The contractor is required to purchase insurance
to provide the following coverage:

99. ARTICLE 12: Uncovering and Correction of Work
Should be read by both the project manager and the project
superintendent to avoid situations where work required to be
inspected by the architect or their consultants is enclosed, encased,
or covered without having been inspected

100. ARTICLE 13: Miscellaneous Provisions
Includes topics such as successors and assigns, which prohibit either
party to the contract to assign either a portion of their contract or
the entire contract to another party without consent of the other
initial party to the contract

101. ARTICLE 14: Termination or Suspension
of the Contract
Conditions under which the owner may terminate the contract
“for cause” are also included in this article. It allows the owner
to suspend or terminate the contract “for convenience”, the
circumstances of which are set

102. ARTICLE 15: Claims and Disputes
It covers a wide range of issues relating to the initiation of claims,
how the process works, and the stages through which claims travel

103. • - Whether initiated by owner or contractor, they must be in
writing to the other party and the initial decision
Notice of Claims
• - Work must proceed, and the owner shall continue to make
payments while the claim is in progress
Continuing Performance
• - The claim must be in writing and these two sections of the
article include the procedures for doing so
Claims for Additional Cost and Time

104. • - The contractor and owner waive claims against
each other arising out of claim
Claims for Consequential Damages
• - The architect will serve as the initial decision
maker unless stated otherwise in the contract
Initial Decision