Construction Management 1.0

Construction
Management
AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp
Grading System
Passing Grade = 70.00 (zero based)
3 Grading Period:
Prelims (30%)
Midterms (30%)
Finals (40%)
Total of 100%

Grading System
Prelim Term Grade
1/3 = Prelim Exam
2/3 = Class Standing (Quizzes, Assignments, Recitations, etc.)
Midterm Grade
1/3 = Midterm Exam

Grading System
Finals Term Grade
1/2 = Final Exam
If Final Grade = 65-69, subject to Removal Exam

1. Introduction to
Construction Management
1.2 The Construction Industry
1. Building Construction
2. Heavy Construction
3. Industrial Construction

The Construction Industry Context
1. Political Factors
2. Economic Factors
3. Social Factors
4. Technological Factors
5. Legal Factors
6. Environmental Factors

Risk Environment in the
Construction Industry
VUCA - Volatility, Uncertainty, Complexity, Ambiguity
D -VUCAD - Disruptions, Volatility, Uncertainty, Complexity,
Ambiguity

Volatility - market dynamics, changes in demand
Uncertainty - market demands, regulation, changing
technology

Complexity - fragmentation, interactions among different
factors
Ambiguity - quality and quantity of data

Disruptions - disasters, pandemic, melt downs
Diversity - cultural, generational, gender

Characteristics
Complex - form and structure
Colossal - size and scale
Crucial - socio-economic contribution
Collaborative - required approach to work
Cyclical - project based
Construction Management
"Construction management is a professional service that
provides a project's owner(s) with effective management of
the project's schedule, cost, quality, safety, scope, and
function.
Construction management works for all projects delivery
methods. Construction Manager's (CMs) responsibility is to
the owner and to a successful project."
- Construction Management Association of America (CMAA)
Functional Areas of Construction Management
Cost Project Management

Schedule Risk Management
Contract Administration Building Information
Quality Management
Safety
Sustainability

Functional Areas of Construction Management
SCOPE

UNCERTAINTY
VOLATILITY
05 POST CONSTRUCTION
04 CONSTRUCTION Close out/ Turn over

DISRUPTIONS
03 PROCUREMENT Delivery, Control, Implementation
DIVERSITY
02 DESIGN Contractual Integration
01 PRE- DESIGN Elaboration of concepts and plans/ Organization of strategy
Conceptualization and Planning

COMPLEXITY AMBIGUITY

The Tripartite Relationship of a Project
ADVISORS
OWNER
TEAM SUB-
CONTRACTOR
Contract Purchase Order
A/E DESIGN Third Party Purchase Order

CONSULTANTS
Obligations
CONTRACTOR SUPPLIER
TEAM

1.3 Supply Chain and Project Team Composition
OWNER TEAM
An individual or business entity who
commissions and funds a project.
Public or private owners, owners
advisors, consultants, occupants, utility
service providers, and authorities having
jurisdiction.
Supply Chain and Project Team Composition
DESIGN TEAM
The person or firm hired by an
owner to manage project design
and technical coordination between
engineering disciplines.
Architects, engineering consultants,
and specialty consultants.
CONTRACTOR TEAM
The team hired by an owner to
oversee day-to-day construction
operations and subcontractor
productivity during construction.
Contractors and subcontractors.

SUPPLIER TEAM
Manufacturers, distributors,
suppliers, and fabricators.

OWNER TEAM
Provide information to both designer and contractor
Pay for fees associated with the work
Make payments to the contractor. It has to be timely
Right to stop the work for a good and just cause
Right to carry out the work on the contractor's behalf
when it becomes necessary (not always due to the fault
or failure of contractor)
OWNER TEAM
Right to perform construction when it becomes
necessary
Right to award single or multiple separate contracts
Right to clean the project site
Right to beneficial occupancy
Right to terminate for convenience (ex. Emergency that
results to reallocation of resources)
Right to terminate for a cause
DESIGN TEAM
Translation of Owner's requirement, PPD and BOD to an
actual design
Develop and furnish both contractor and owner the
Design and Specifications
Respond to all queries RFI, Submittal, Clarification,
Change Orders, etc.
Observe the work
DESIGN TEAM
Certify and recommend
Right to receiving payments due him/her
Right to interpret contract documents (design and
specs)
Right to inspect work

CONTRACTOR TEAM
Review contract documents
Follow procedures in the PPM/CAG
Deploy competent personnel, supervisory and
management staff/ professionals
Site management
Maintenance of records
Indemnify and hold harmless the owners and staff
CONTRACTOR TEAM
Furnish copy of bonds to the owner
Manage field risks

CM should be engaged in the project
AS EARLY AS POSSIBLE
and assist the owner through all phases of delivering the

project
REGARDLESS OF THE PROJECT DELIVERY METHOD

1.4 Project Delivery Method
Traditional: Design- Architect/
Bid-Build (DBB)
Consultants
Engineer
Stakeholders and participants Design Contract

Owner
Architect/ engineer
Contractor OWNER
TEAM
Subcontractor BIDDER
Suppliers
Construction
Product representatives SUB-
Contract
BIDDER
CONTRACTOR
Decision to use D-B-B Subcontract
Most familiar and most used method CONTRACTOR SUCCESSFUL

BIDDER
SUPPLIERS Procurement

Bid-Build (DBB)
Consultants
Engineer
Advantages Design Contract

Widely acceptable
Owner retains control
Designer and contractor work directly OWNER
TEAM
for the owner as independent parties BIDDER
Owner "knows" the cost prior to the

Construction
start of construction SUB-
Contract
BIDDER
Cost risk transferred to the contractor

CONTRACTOR
Subcontract
SUCCESSFUL
CONTRACTOR
BIDDER

Bid-Build (DBB)
Consultants
Engineer
Disadvantages Design Contract

Feasibility
Expert advise on construction issues
Selection criteria for Project delivery OWNER
TEAM
method, designers, contractors and BIDDER
procurement strategy and contract type

Construction
Development of project procedures/ SUB-
Contract
BIDDER
contract administration manual

CONTRACTOR
Input on Contract language Subcontract

SUCCESSFUL
CONTRACTOR
BIDDER

Multiple Prime/ Architect/
Owner Build
Consultants
Engineer
Stakeholders and participants Design Contract

Owner
Architect/ engineer
Contractor OWNER
Subcontractor Construction
TEAM Procurement
Suppliers Contract
Product representatives
Construction
Decision to use O-B Contract SUPPLIERS

CONTRACTOR
Owners who are large corporate entities

Contractor-developers on large-scale projects
Owners with on going capial construction CONTRACTOR
Procurement
program

Owner Build
Consultants
Engineer
Advantages: Design Contract

Increased owner control
Work easily fast-tracked
Designer works directly for the owner Construction
OWNER
TEAM Procurement
Contractor works directly for the owner Contract
Owner "knows" the cost prior to the Construction

start of construction CONTRACTOR Contract SUPPLIERS
Save GC markups as Owner acts as GC

Procurement
CONTRACTOR

Owner Build
Consultants
Engineer
Disadvantages: Design Contract

Linear phasing but not as slow as
Design-Bid-Build
Owner is responsible for design Construction
OWNER
TEAM Procurement
Owner has risk of controlling time and Contract
coordination Construction
Adversarial relationships fostered CONTRACTOR Contract SUPPLIERS
Multiple accountability for performance

Unknown "final" cost at construction
start CONTRACTOR
Procurement
Same owner risks as DBB approach

Construction Manager Architect/
At Risk (CMAR)
Consultants
Engineer
Stakeholders and participants: Design Contract
Owner
Architect/ Engineer OWNER
Contractor TEAM
Subcontractors
Suppliers Construction
Contract
Product representatives
SubContract SubContract
Decision to use CMAR

SUB- CONTRUCTION SUB-
CONTRACTOR MANAGER CONTRACTOR
Owner have critical needs

Must achieve ambitious project schedules Procurement
Purchase
AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp SUPPLIERS

At Risk (CMAR)
Consultants
Engineer
Advantages: Design Contract
Well suited for fast-tracking

Contractor (and subcontractor) input on OWNER
design alternatives TEAM
Better cost information at early stages

Designer works directly for the owner Construction
Contract
Early involvement of Construction
Expertise SubContract SubContract
Allows "picking" of the builder

Owner gets a Guaranteed Maximum Price

Procurement
Purchase

At Risk (CMAR)
Consultants
Engineer
Disadvantages: Design Contract
Changes CM's accountability after GMP is

signed OWNER
Tempting to sign GMP "too soon" TEAM
Variations in procurement methods

Potential bid shopping after GMP is set Construction
Contract
SubContract SubContract
Procurement
Purchase

Design-Build (D-B) ADMINISTRATIVE OWNER
PROFESSIONAL
TEAM
Stakeholders and participants:
Owner Design /
Architect/ Engineer
Construction Contract SUB-
Consultants
CONTRACTOR
SubContract
Contractor
Subcontractors Architect/
CONTRACTOR
Suppliers Engineer
Product representatives SubContract
SUB-
Decision to use D-B Consultants Procurement CONTRACTOR
Owner have single point of accountability

under a single contract Purchase
SUPPLIERS

PROFESSIONAL
TEAM
Advantages:
Single point accountability for Design /
Construction Contract
project delivery
SUB-
Consultants
CONTRACTOR
SubContract
Reduced disputes
Can cut time/cost Architect/
CONTRACTOR
Early involvement of Engineer
Construction expertise SubContract
Budget establish early on SUB-

Consultants Procurement CONTRACTOR
Purchase
SUPPLIERS

PROFESSIONAL
TEAM
Disadvantages:
Owner's loss of control Design /
Construction Contract
Early definition of the program
SUB-
Consultants
CONTRACTOR
SubContract
required
Potential for quality to be Architect/
CONTRACTOR
compromised Engineer
SubContract
SUB-
Consultants Procurement CONTRACTOR
Purchase
SUPPLIERS

Considerations for Choosing
Project Delivery Method
OWNER OWNER OWNER

OWNER ROLE OWNER RISKS
REQUIREMENTS RELATIONSHIPS RESOURCES
Complexity Control Contractual Response and Budget

Schedule Fiduciary Strategy

1.5 Contract Types
1. Firm-Fixed Price/ Lump-Sum
2. Guaranteed Maximum Price
3. Cost Reimbursement (Cost Plus)
4. Unit Price
5. Remeasurement
6. Target Price
7. Time and Material

1.5 Contract Types
Firm-Fixed Price/ Lumpsum
Contractor agrees to perform the specified
work with a fixed-price (a.k.a. lump sum) for
the specified and contracted work. Any extra
work is executed upon receipt of instruction
from the owner.
Appropriate for highly defined and well
detailed projects.

1.5 Contract Types
Guaranteed Maximum Price
Owner and contractor agree to a project cost
guaranteed by the contractor as MAXIMUM.
Contractor is compensated for actual costs
incurred, in connection with design and
construction of the project, plus a fixed fee-all
subject.
Requires adequate cost information sufficient
to establish a firm target price very early in
negotiation.
1.5 Contract Types
Cost Reimbursbents
It is a type of contract in which contractor agrees to do the
work for the cost related to the project plus, an agreed upon
amount of fee that covers profits and non reimbursable
overhead costs. Following are different types of cost-plus
contracts:
1. Cost plus % fee contract
2. Cost plus fixed fee contract
3. Cost plus incentive fee contract (fixed vs %P)
Suitable for projects with design and
construction running concurrently.
1.5 Contract Types
Unit Price
The work to be performed is broken into
various parts and a fixed price is established
for each unit of work. This type of contract is
well suited for repetitive or easily quantifiable
tasks. A unit price contract provied benefits to
both owners and contractors.
Suitable for projects easily quantifiable work
whose total count/quantity can not be
determined at the start.
1.5 Contract Types
Remeasurement
Contractor is paid as per the actual quanitities
of the work done. In this type of contract in
which contractor agrees to do the work based
on one of the following criteria:
1. Bill of quantities, or
2. Schedule of rates, or
3. Bill of material
Payment is linked on measure actual
completion.
1.5 Contract Types
Target Price
A target cost contract is based on the concept
of top-down approach, which provides a fixed
price for an agreed range of out-turn cost
around the target. In this type of contract over
run orr under spend are shared by the owner
and the contractor at a predetermined agreed
upon percentages.
Can be used together with Cost Reimbursbale
Contracts.
1.5 Contract Types
Time and Material
A time and material contract has elements of
unit price and cost plus type of contract. This
type of contract is mainly used for maintenance
contract and small projects.
Suitable for job order maintenance & repair
contracts.

1.5 Contract Types

1.6 CONSTRUCTION,
PROJECT AND OPERATION

What is CONSTRUCTION?

Construction
The Industry
A stage in the Project Life Cycle
A work package or an activity

What is a PROJECT?

Project
A project is a temporary endeavor undertaken to create a
unique product service or result.

Project
Characteristics of a Project:
Unique
Temporary
Limited Resources
Involves People
CREATION OF VALUE

Unique Project Outcomes
Product Service Result
Mobile Setup of a BPO Documentation
application Order processing of all policies and
Condominium/ procedures
Hotel Improved
employee
engagement
Reduction of
accidents

Operation
Operations constitute an organization's on-going,
repetitive activities, such as accounting or production.
Characteristics Operations:
Routine
Repetitive
Goes on as long as the organization exists
MAINTENANCE OF VALUE
Project vs Operation
PERMANENT
TEMPORARY
(ON GOING)
DELIVERS THE
DELIVERS
SAME OUTPUT
UNIQUE OUTPUT CONTINUOSULY
INNOVATIVE IN REPETITIVE
NATURE IN NATURE
EXISTS
EXISTS BEFORE A
AFTER A
PRODUCT
PRODUCT
ENHANCES THE
PERFORMANCE
TRANSFORMATIONAL
OF NORMAL
PRACTICE
1.7 PROJECT, PROGRAM,
PORTFOLIO MANAGEMENT

Project
A project is a temporary endeavor undertaken to create a
unique product service or result.
tangible
relatively easy to describe
relatively easy to define
relatively easy to measure

Program
Related & interdependent projects optimized for business
benefits for the organization
a group of projects
grouped to improve control
if a specific project fails to deliver the expected results, a
new project may be spawned

Portfolio
related or unrelated projects and/or programs managed
to meet strategic business objectives

PORTFOLIO
PROGRAM PROGRAM PROGRAM
1.0 Project 2.0 Project 1.0 Project 1.0 Project 2.0 Project

1.8 PROJECT LIFE CYCLE

Project Life-Cycle
MONITORING &
INITIATION PLANNING EXECUTION CLOSING
CONTROL

Project Life-Cycle
The first phase in a project's life cycle
A project officially launches
INITIATION
The project is named, and a broad plan is defined
Goals are defined, along with its constraints, risks, and
shareholders
Studies may be conducted to identify its feasibility

Project Life-Cycle
Nature and Scope
1. Nature of the porject
2. Scope of project, details, extent
. A. Deliverables
INITIATION - Outcome
- Materials needdd
B. People
- Customer/ Client
- Contractor
- Supplier
Project Life-Cycle
Project Documents
1. Project requirements
2. Project definition
INITIATION 3. Work breakdown Structure
4. Scheduling
5. Budget
6. Design documents
7. Materials/ Specification
8. Manuals - users, system/ procedures, maintenance

Project Life-Cycle
Risk Management
1. identify the risks
INITIATION 2. Quantify risks
3. Prioritize
4. Construct action plans

Project Life-Cycle
A roadmap that will guide teams from creating a
project plan throughout the project's execution and
closure phases is developed comprehensively during
PLANNING
the planning stage
Deadlines must be set, resources must be allotted
Breaking down tasks into smaller, manageable
activities make it easier to manage project risks, costs,
quality, time, and so on

Project Life-Cycle
The project plan is implemented during the project
execution phase
Teams will work on the deliverables to ensure the
EXECUTION
project meets the necessary requirements
Everyone usually gathers for a meeting to mark the
official start of the project
Modes of communication and project management
tools are identified before the project plan is executed

Project Life-Cycle
Team members famirialize themselves with the

necessary statues meetings and reports that will be
EXECUTION
conducted throughout this phase to collect project
metrics
It is a critical point as it will help everyone determine if
their efforts will ultimately be fruitfull or not

Project Life-Cycle
This happens at the same time as the execution
phase
It's the job of the project manager to oversee
MONITORING operations and make sure that everythings is headed
& in the right direction, accroding to plan
CONTROLLING Monitor resources, manage risks, head status
meetings, and reports
If unforseen issues arise, adjustments may have to be
made to the plans, as well as the schedule

Project Life-Cycle
Final phase of the project life cycle
Record all deliverables, organize documents in a
centralized location, and hand over the project to the
client or the team responsible for overseeing its
CLOSING operations
Teams come together for a final meeting to discuss
the insights they've learned and to reward the hard
work of each member

Where do Projects originate?
PROJECT PROJECT
OPERATIONS Need Time Go live
Business as Usual (BAU) - As is New Business as Usual (BAU) - To be

When is a Project considered
success?
Successful - On time, on budget, used and met
customer expections
Challenged - Over budget, late, or with less-than-

required features, specs, and functions
Failed completely - Canceled prior to completion or

delivered but never used
Why do Projects fail?
Lack of senior management commitment
Inadequate project planning
Absence of user involvement
New or unfamiliar technology
Lack of defined, clear, or concise requirements

Why do Projects succeed?
Effective project management process
Project tied to the organization's business goals
Senior management commitment
Detailed requirements
Realistic schedule
Good stakeholder relationships
Empowered project manager
Skilled and appropriate team member with defined roles and
responsibilities
Availability of funding
THANK YOU.

Construction Management 1.0

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Construction

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

If Final Grade = 65-69, subject to Removal Exam

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Ambiguity - quality and quantity of data

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Diversity - cultural, generational, gender

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Cost Project Management

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

04 CONSTRUCTION Close out/ Turn over

01 PRE- DESIGN Elaboration of concepts and plans/ Organization of strategy

Conceptualization and Planning

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Contract Purchase Order

A/E DESIGN Third Party Purchase Order

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

and assist the owner through all phases of delivering the

REGARDLESS OF THE PROJECT DELIVERY METHOD

Stakeholders and participants Design Contract

Decision to use D-B-B Subcontract

Most familiar and most used method CONTRACTOR SUCCESSFUL

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Advantages Design Contract

Owner "knows" the cost prior to the

Cost risk transferred to the contractor

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Disadvantages Design Contract

procurement strategy and contract type

contract administration manual

Input on Contract language Subcontract

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Stakeholders and participants Design Contract

Decision to use O-B Contract SUPPLIERS

Owners who are large corporate entities

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Advantages: Design Contract

Contractor works directly for the owner Contract

Owner "knows" the cost prior to the Construction

Save GC markups as Owner acts as GC

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Disadvantages: Design Contract

Owner has risk of controlling time and Contract

Multiple accountability for performance

Same owner risks as DBB approach

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp

Stakeholders and participants: Design Contract

Decision to use CMAR

Owner have critical needs

AR. ARJEE LOUIE DC. JIMENEZ, uap, rmp SUPPLIERS

Advantages: Design Contract

Well suited for fast-tracking