intro to construction 2

7/31/2019 Intro to Construction 2

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Construction Methods & ManagementCIEG 486-010


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Construction Methods & Management

CIEG 486-010

Construction Management

Contractual arrangement: at-risk or

management services for fee only

or

Act of managing the construction process


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CIEG 486-010

Construction Management

Contractual arrangement

Construction management personnel can

represent owner or contractor

CM manages the basic resources of

construction


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Basic Resources

workforce

subcontractors

equipment

constructionplant

material

information

time

money


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CIEG 486-010

Project Management

Optimize the three attributes of: quality, cost,and time

Principle objective of a construction manager

is to complete each project on time and withinbudget, while maintaining acceptable levels of

safety and risk


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CIEG 486-010

Method or System of Project Delivery

Traditional design-bid-build

Phased or Fast-track

Design-build


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Traditional Design-Bid-Build

Phased or Fast-Track Construction


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WestApproach

Lighting

EastPiers

WestPier

s

BridgeDe

ck

EastAppr

oach

Towers

MainCables

Suspende

dSteel

Trusses/Framing

TestPiles

Anchorages


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CIEG 486-010

Contract Types

Traditional vs. alternative Classification by method of awardandmethod of pricing

Model contracts have been developedby AIA, AGC, CEC, DBIA, CMAA, andEngineers Joint Contract DocumentsCommittee (EJCDC)


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CIEG 486-010

Contract Types

Method of Award

1. Competitive bidding formally advertised public work

selective invitation for private work

awarding of contracts by: Lowest responsible bid or

Best value i.e.: technical score price orprice + time(ft), and other variations


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CIEG 486-010

Contract Types

Method of Award

2. Negotiated contracts Generally private work

Benefits include flexibility of pricing arrangement

Often used on projects of large size and great

complexity Owner may value expertise and integrity of a particular

contractor and can award contract without competitionthat may otherwise exclude that contractor from thework


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CIEG 486-010

Method of Pricing

Fixed-price

1. Lump sum Traditional, single fixed price

Predetermined price that includes profit,

overhead, and all other costs

Greatest risk to contractor resulting in ahigher markup (the greater the risk, the

higher required rate of return )

Most common contract form


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CIEG 486-010

Method of Pricing

Fixed-price

2. Unit-price contract Prices of specified units of work are fixed or

predetermined

Actual cost to the owner will vary with actualquantities placed

Best used when details and general characterof the work are known, but quantities aresubject to variation

Risk of unbalanced bids


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CIEG 486-010

Method of Pricing

Cost-plus

Contractor agrees to perform the work for a fixedor variable fee covering profit and home office

costs (general overhead)

Field costs are reimbursable at actual cost

Used when: nature of the work or physical conditions are

unpredictable

scope is unknown or difficult to define


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CIEG 486-010

Method of Pricing

Cost-plus All cost-plus contracts depend on cooperationamong A/E, owner, and contractor

Record keeping and timely evaluation are

extremely critical Detail record of labor hours and salaries, material

and equipment must be maintained

Good application for professional CM services


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CIEG 486-010

Types of Cost-plus Contracts

3. Cost plus fixed %

Fixed % based on portion or all ofreimbursable costs

Used in construction involving new

technology or extremely pressing needs

Owner assumes risk

Contractor cooperation very high

Little or no incentive for cost savings


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CIEG 486-010

Types of Cost-plus Contracts

4. Cost plus fixed fee More incentive for cost savings

Incentive for timely completion

Risk shared by owner and contractor

5. Cost plus variable %

Also called sliding scale % Keeps fee in line with type & volume of work

Fee becomes progressively smaller on work that isrepetitive, requires little or no re-engineering, re-planning, or additional layout


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CIEG 486-010

Types of Cost-plus Contracts6. Target estimate

May be based on dollar amounts, man-hours, schedule,or combination

Cost savings or overrun shared by owner and contractorat predetermined split

Cost underrun increases contractor profit, overrundecreases profit

7. Guaranteed maximum price Used with well defined scope of work

Particularly suitable for turnkey operation

Contractor or design-builder assumes all risk

Provisions to share savings can be applied


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CIEG 486-010

Construction Contracts

Prequalification of bidders Evidence of satisfactory previous experience Financial stability

Advanced or specialized prequalification may be

required as dictated by the magnitude and nature ofthe work

Bid bonds are often required


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CIEG 486-010

Elements of a legal contract

offer

acceptance

consideration

legal in every respect requires a meeting of the minds

offer + acceptance = binding obligation


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Construction Contract Documents

Advertisement for bids

Information for bidders Bid form

General notices

Notice of award

Notice to proceed

Bid bond

Performance bond

Payment bond

Contract form oragreement

General conditions orprovisions

Supplemental and/orspecial conditions

Plans

Specifications


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Construction Contract Documents

Characteristics of a good contract document:

1. Carefully considered

2. Expressed clearly3. Time-tested

4. Comprehensive

5. Fair

6. Balanced

7. Applicable to the elements of a construction projects


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CIEG 486-010


bidders are required to:

examine all portions of the contract documents

examine the physical conditions of the site

determine legal requirements affecting the work

complete these investigations prior to bidding


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CIEG 486-010


contract documents should: Include a hierarchy to determine which

documents govern in case of conflict, i.e.:

DelDOTs hierarchy

Not contain ambiguous language

Not contain exculpatory clauses


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Construction Contracts -- General Conditions

Contractors warranties Defective drawings

Approval of contractorsplans and equipment

Approval of shop drawingsother submittals

Guarantee by the Contractor

Conduct of the work

Defective work Relations with other

contractors andsubcontractors

Inspection of materials Inspection of field work

Authority of the Engr.

Duties of the inspector

Permits and licenses Labor considerations

Work done by the owner

Lines and grades

Order and discipline Performance

Final inspection &acceptance


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Construction Contracts -- General Conditions

Federal, state, and localgovernment regulations

Employment (EOE rules)

Emergencies

Minimum wage rate Domestic vs.foreign materials

and labor

Construction reports

Payrolls and bills of material Cooperation among

contractors

Patents

Retainage Bonding and insurance

Guarantee of equipment

Borings

Spare parts


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Risk Allocations -- General Conditions

Force majeure

Indemnification

Liens

Labor laws

Differing site conditions

Delays and extension of time

Liquidated damages

Consequential damage

Occupational safety, andhealth of workers

Permits, licenses, andregulations

Termination for default bycontractor

Suspension of work Warranties and guarantees


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CIEG 486-010

Specifications

Standard, supplemental, and special

provisions two types of specifications:

method specification dictates equipment

and proceduresperformance specspecifies only the

desired end result or product

should include hierarchy


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CIEG 486-010

Hierarchy

Governing ranking of contract components in

case of a discrepancy (DelDOT) General Notices Special Provisions

Plans

Supplemental Specifications

Standard Construction Details

Standard Specifications


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CIEG 486-010

Classification Coding System

Architectural building and site developmentindustry employees the CSI Format that

includes 16 divisions of work.

Public owners generally use a system ofsections or divisions developed and

employed for several decades


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CIEG 486-010

Codes, Standards, and Regulations

Model Codes Basic/National Building Code (BOCA Code)

Uniform Building Code

Standard Building Code

National Electric Code (NEC) and Life Safety Code by

the NFPA under ANSI

The International Building Code 2000 (IBC) replaces

the first three codes. Several subcodes of the IBC

include Fire, Residential, Plumbing, Energy

Conservation, Mechanical, & Private Sewage


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CIEG 486-010


Model Codes Model codes are adopted in whole or in part by the

local municipality, and become enforceable under thelaw

Zoning Regulations

imposed by local zoning commissionsEnvironmental Regulations

imposed by the EPA, State DEP (DNREC), or local

agency


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CIEG 486-010


StandardsASTM

Underwriters Laboratories, Inc. (UL)AASHTO

ACI

AISC many, many others

no enforcement by these agencies

specifications generally refer back to these

standards


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CIEG 486-010

Submittals required in the contract copies of subcontracts

shop drawings and support calculations

catalog cuts material or equipment samples

schedule(s)

certified payrolls certificates of insurance

environmental test reports

material test reports & certifications


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CIEG 486-010

Shop Drawings

structural steel details & erection plan

erection procedures (safety)

PS/PC concrete items

shoring & underpinning details

jacking plans and calculations

scaffolding and falsework

concrete formwork design and details

construction sequencing diagrams


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CIEG 486-010

Shop Drawings

cofferdam design & details

dewatering procedure stream diversions

pipe and ductwork fabrication details

reinforcing steel bending diagrams and bar lists

structural timber elements

ornamental iron or steel

maintenance of traffic plans (alternates)


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CIEG 486-010

Payments and related issues mobilization and initial costs

retainage progress payments and partial payments

material payments

change orders

substantial completion

punchlist

final acceptance and payment


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CIEG 486-010

Changes in plans and specs

clarification, correction, modifications prior to bidare referred to as addenda

owner must maintain a system of distributing and

acknowledging receipt of addendum

plan and spec changes after award are referredto as revisions, and generally require issuance

of a change order(s)


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CIEG 486-010

Change Orders a written order issued by the owner to the

contractor for a change to the contract within thescope of work

change orders are written for: extra work

increasing or decreasing the contract quantities alterations

change orders state the basis and amount ofpayment and time extensions


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CIEG 486-010

Contracts

Liquidated damages

Incentive/Disincentive (bonus/penalty)

Acceleration

Increase crew levels, crew size

Add shifts and/or extend work hours

CPM schedule is an extremelyvaluable tool inanalyzing delay claims


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CIEG 486-010

Claims and Disputes

a claim is a request by a contractor for additional

compensation or time extension for occurrences

beyond the contractors control including:

differing or unexpected site conditions

change in scope

delays caused by the owner

owner has duty to provide adequate, accurate data

to the bidders


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CIEG 486-010

Claims and Disputes Owner is liable to contractor when:

inaccurate data are given

extras develop because of improper design

design is significantly changed after the contractis signed (constructive change)

Contractor must prove entitlement and theassociated damages

Contractor must provide timely notice of claimupon discovering impact


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CIEG 486-010

Types of Claims

delay or disruption claim

extra work claim

acceleration

impossibility-of-performance claim

defective design claim (error or omission)

interference claim

superior knowledge claim


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CIEG 486-010

Dispute Resolution Early settlement between parties

Alternative depute resolution (ADR)

negotiation arbitration (1 or 3 members)

mediation neutral advisors

Dispute Review Board (DRB)

3 or more odd number of board members selectedevenly by both sides

Litigation sometimes unavoidable; usually undesirable; but

sometimes best method


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CIEG 486-010

Credits

Credits reimbursement from contractor toowner for work eliminated (lump sum

contract or item)

Credit may also be given when specifiedperformance criteria is not met


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CIEG 486-010

Claims Avoidance

producing comprehensive, accurate, contract

documents

constructibility review

clear understanding of contract requirements prior to

bidding

having good administrative procedures in place

open and honest communication

timely troubleshooting


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CIEG 486-010

Claims Avoidance

Claims avoidance begins in the pre-construction phase

Contract documents need to be clear,

accurate, comprehensive, and fairly

distribute risk

C i M h d & M


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CIEG 486-010

Ability to influence cost over time Greatest potential to influence cost is during the

pre-construction design phase

Claims avoidance begins during pre-construction Design phase

Intensive preparation and review of contract

documents Careful consideration of methods and

equipment = consider overall constructibility


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100%

0%

Ability to Influence Construction Costs over Time

Levelof

Influence

on

Cost

Oper.Concept &

Feasibility

Design and

EngineeringProcurement and Construction Startup


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CIEG 486-010

Design Professionals should:

Specify locally available material

Allow substitution of equal quality material

Avoid one-ofa-kind or non-standard items

where possibly

Design structures with as many redundant

elements as possible Design should allow construction using the

prevailing methods and equipment


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CIEG 486-010

Design Professionals should:

Design to minimize required labor

Specify a quality of workmanship consistent withthe quality of the project

Do not require the contractor to assume

responsibility for information that should be

furnished by the design engineer/architect Produce simple, straight-forward specs = clearly

state what is expected


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Construction Methods & ManagementCIEG 486-010