CONTRACTS AND SPECIFICATION

Presented By: Program & School:

ALVAREZ, Reena Kaye B. Bachelor of Science in Civil Engineering
LEBOSADA, Janegelle H. School of Engineering & Technology
PASTOR, Sophia Erica N.

Adviser
Engr. Crispin S. Lictaoa
Contract and Specification for Construction Project

➢ It is a written document between a property owner and a general contractor, specifying the

construction, renovation, alteration or other work to be done on the property owner's home

or land.
v Construction Pricing and Contracting
v Competitive Bidding
v Negotiated Contracts
v Speculative Residential Construction
v Force Account Construction
v Contract Provisions for Risk Allocation
v Construction Pricing and Contracting
The construction price includes the direct project cost including field supervision expenses

plus the markup imposed by contractors for general overhead expenses and profit. The

factor's influencing a facility price will vary by type of facility and location as well.
v Competitive Bidding
The basic structure of the bidding process consists of the formulation of detailed plans and

specifications of a facility based on the objectives and requirements of the owner, and the

invitation of qualified contractors to bid for the right to execute the project.
v Negotiated Contracts
A major reason for using negotiated contracts is the flexibility of this type of pricing

arrangement, particularly for projects of large size and great complexity or for projects which

substantially duplicate previous facilities sponsored by the owner.

1. Cost plus fixed percentage

2. Cost plus fixed fee

3. Cost plus variable fee

4. Target estimate

5. Guaranteed maximum price or cost

v Speculative Residential Construction
Speculative builders construct residential or commercial buildings for sale or rental on land

they own. Speculative construction includes the activity commonly referred to as "house

flipping". The developers often build houses and condominiums in anticipation of the demand

of home buyers.
v Force-Account Construction
The use of a grantee's own labor force to carry out a capital project. Force account work may

consist of design, construction, refurbishment, inspection, and construction management

activities, if eligible for reimbursement under the grant.

v Contract Provisions for Risk Allocation
Provisions for the allocation of risk among parties to a contract can appear in numerous

areas in addition to the total construction price. Typically, these provisions assign

responsibility for covering the costs of possible or unforeseen occurrences.

- Force majeure
- Indemnification

- Liens
- Labor laws
- Delays and extensions of time
- Liquidated damages
- Consequential damages
- Occupational safety and health of workers
- Permits, licenses, laws, and regulations
- Equal employment opportunity regulations
- Termination for default by contractor

- Suspension of work
- Warranties and guarantees
Construction contract
➢ It is simply an agreement between two or more parties to provide services in exchange for

payment.

1. An offer

2. Acceptance

3. Consideration (i.e., money, or something of value)

4. Legality (you can’t contract to break the law!)

Common Types of Construction Contracts:
➢ Lump-Sum Contracts

- This is the simplest form of construction contract.

➢ Cost-Plus-Fee Contracts

- These contracts require that a contractor be reimbursed for all costs incurred on the
project (costs).

➢ Time & Materials contracts

- This is an agreement where the contractor is paid an hourly rate for labor, the actual
cost of materials and equipment, and an additional amount to cover overhead and
profit.
➢ Unit Price Contracts

- An arrangement where the customer pays a fixed, agreed-upon amount for completion
of each unit of work.

➢ Guaranteed Maximum Price (GMP) Contracts

- A cost-type contract, where there is an agreed-upon limit to how much the customer will
be obligated to pay.
Requirements for a Valid Contract
➢ Mutual Assent
Each party must have a shared undestanding regarding what the subject matter of the
contract is.
➢ Offer and Acceptance
One party must make an offer by clearly communicating their intent to be bound in a contact.
➢ Consideration
This where both parties mutually exchange something of value in order to make the
agreement binding.
Specification for Construction

➢ This is part of construction contract. They detail the work, materials, and installation

required to complete a project.

➢ The specs are a subcontractor's field guide on what materials to use, how to install them,

and the desired level of quality.

Types of Construction Contract Specifications:

➢ Prescriptive Specifications

- Provide step-by-step details and instructions on how the types of materials to be used
and the desired installation methods.
v General Provisions - These provisions will reference national or state building codes
and standards that must be complied with.
v Required Products - Lists the type of products and materials required, based on the
performance and structural requirements.
v Execution Procedure - Details the methods of installation and how to
measure quality or effectiveness.
Types of Construction Contract Specifications:

➢ Performance Specifications

- Provide all of the operations requirements to complete a project.

➢ Proprietary Specifications

- Are used when doing renovations to an existing structure, and the client needs to
match the improvements to the completed portion.
Common types of construction projects that may require
specifications include:

➢ Residential projects such as condos, single-family homes, dormitories and townhomes.

➢ Industrial projects such as production buildings, oil refineries and manufacturing.

➢ Civil infrastructure projects such as dams, railways and underground tunnels.

➢ Institutional projects such as stadiums, hospitals and schools.

Importance of Specifications
➢ Clarifying project details

The more details included in a contract, the more accurately construction companies may
complete a project.

➢ Setting expectations

Specifications are a great way to set clear expectations between a construction company
and its client.

➢ Determining pricing

Specifications often outline the materials and labor needed to complete a project.
THANK YOU!
 Presenters

Roneilla Jane B. Alamos Arabela D. Medina Arn Mayven M. Reyes

BS. Civil Engineering (TCIE 4-1) BS. Civil Engineering (TCIE 4-1) BS. Civil Engineering (TCIE 4-1)
Organization The driving force behind every organizations is its management team.
Different teams operate in different ways. There is no universal accurate
management to define the one that is the best. Just the concept that explains
why some operations were managed successfully in the past to suggest what can
be done in the future success.

The organization structure of small enterprise may be very simple.

The owner is usually the manager. He has contact with the people
of his organization and is the one who establishes the policies. He
assigns the job to be done and follow up on the job for the
purpose of direction and coordination. As his company grows,
bigger, the problem or organization for groupings, supervising and
serving operations become more complex.
Organization is a group of individuals who are cooperating willingly and effectively for a common goal.

It is nothing more that the mechanism by which administration directs, coordinates and controls its business. It

is indeed, the very foundation of administration. To be specific, organization seeks to know who is to do and

what is to be done.

Organizations are structured to promote better management. However, it is the performance of the people

who fill the positions that determines the success of the enterprise and not the organizational design itself.

When an organization is structurally ill designed, when it passes for a makeshift arrangement, administration is

made difficult and ineffective. On the other hand, when it is logical, clear cut and streamline, the paramount

need of administration has been met.

Apparently, there is no ideal organization designed to emulate. A management structure is only a vehicle

used to attain the objectives and goals of an institution, and therefore, must be realistic and responsive to the

call for a change of those needs.

This Photo by Unknown Author is licensed under CC BY This Photo by Unknown Author is licensed under CC BY-SA-NC
Structural Elements of an Organizations

1. Men. These are the different members of the organization starting from the very top of the
last workman in the enterprise.
Structural Elements of an Organizations

2. Materials. Represents the materials necessary in the distribution of functions or in the

attainment of its objectives.
 Structural Elements of an Organizations

3. Machine. The tools necessary in producing its desired output.

This Photo by Unknown Author is licensed under CC BY-SA

Structural Elements of an Organizations

4. Methods. The procedures and ways used in the course of its actions.
5. Money. The financial resources of the organization.

This Photo by Unknown Author is licensed under CC BY-NC-ND

Project Organization and Staffing

Project organization and staffing is the part where organization structure,

individual positions and functions are developed, duties and responsibilities
are defined, teams are formed, and training programs are formulated
Structural Elements of an Organizations

1. Distribution of functions
The functions to be performed, the groupings of functions, and the vertical and horizontal
task relationships among functions.
2. Vertical and horizontal authority relationships
Who are the authority to do what
3. Communication and decision processes
The manner in which formal decisions are made and by whom.
4. Policies
The decision, rules or guidelines established
Organization Structure What makes up an ideal construction organization?
Organization structure is developed based on certain
parameters, such as determination and grouping of
activities; assigning of activities to departments, decisions
and actions defining hierarchy of relationships among the
departments, divisions and sections; and providing
coordination lines among peoples and tasks.
The Organization structure reflects the vertical and
horizontal working relationships among the departments,
divisions and sections. These could be functional or
geographic based.
.
Organization Structure
In actual construction practice, organization structure are group either by skill
(i.e., masonry, carpentry, plumbing steelworks, equipment), by discipline (i.e.,
civil, electrical, sanitary, mechanical, architectural), or by gang or clusters of
workers usually headed by a foreman.
Deciding on the type of organization structure to employ for a project is greatly
dependent on the actual needs of a project. Presented in the succeeding pages
are typical organization structures for large projects, smaller projects and one
depicting the interrelationship among project participants.
Principles of Good Organization

1. Principles of Objectives
2. Analysis
3. Simplicity
4. Functionalism
5. Departmentalization
6. Centralization of Authority and Responsibility
7. Limited Span of Control
Organization Structure A
(Large Projects)
Project Manager Home Office
Designer
Support Group

Construction Project Engineer

Management / Deputy Project
Consultant Manager

Administrative Finance Procurement Structural Architectural Sanitary Electrical Mechanical

Department Department Department Department Department Department Department Department

Personnel Accounting Canvassing Division

Division / Time
Cashiering Purchasing Division
Keeping

Utility Payroll Warehousing Division

Specialty
Security Subcontractors
Contractors
Organization Structure A Project Manager
Home Office
(Small Projects) Support Group

Administrative
Technical Group and Finance
Group

Administrative
Masonry
Personnel

Carpentry Accounting

Plumbing and
Cashiering
Sanitary

Electrical Procurement

Steelworks
Organization Structure A
Interrelationships among Project Participants

Project Owner

Construction
Designers /
Management
Planners
Consultant

Contractor

Project Manager

Department 1 Department 2 Department 3 Department 4

Division Division Specialty

Sub-Contractor
Contractor
Position Chart B
(Small Projects) Project Manager / Project Engineer

Administrative
Civil Engineer and Finance
Group

Foreman Peronnel Officer

Masonry Accounting

Carpenters Cashiering

Procurement
Plumbers
Officer

Electricians

Steelmen
Functional Chart
A

B C D
E

F G
Functional Chart
A 1. Manage day-to-day activities
2. Provide overall direction
3. Responsible for the technical
performance & successful completion of
the Project
4. Engineer project expenses are within
budget
5. Conduct periodic coordination meetings
6. Administer periodic evaluation of project
activities and the productivity of the project
participants
7. Carry out responsibilities for preparing
the procedure for the turnover of the
project when completed
Functional Chart
B 1. Recruit, select, hire, place competent 6. Secure necessary licenses and permits
workers 7. Provide messenger services
2. Handle timekeeping
3. Monitor attendance, tardiness and
absences
4. Update personnel records
5. Responsible for security services and
management
Functional Chart
C. 1. Design and adopt appropriate
accounting procedures and standards
2. Record all financial transactions
3. Summarize the "Book" on a monthly,
quarterly and annual basis
4. Responsible for payroll services
5. Undertake Billing and Collection
6. Issue Receipts of Payments
7. Responsible for timely payments of
SSS, Pag-Ibig and Philhealth dues
D 1. Responsible for procurement of
construction materials, supplies,
equipment, etc.
2. Handle property and supply
management including inventory of
materials, equipment, vehicles, tools and
other properties of the company.
Functional Chart
E 1. Responsible for Technical Operations
including field investigation, surveys and project
management services depending on the
specialization like: civil works, architecture,
sanitary and plumbing, electrical works and
mechanical works
2. Undertake the actual physical execution of
works called for in the project
3. Handle the repair and maintenance of vehicles, testing and commissioning of air conditioning
heavy equipment and machineries of the
company.
F 1. Depending on assigned tasks, responsible in
implementing and commissioning certain jobs
called for in the project
G 1. Normally, specialty contractor (e.g.,
plumbing, glass works, air conditioning, elevator
installation) perform tasks that require skills not
commonly available.
Thus, specialty contractors handle the installation,
units, elevators, glass works (claddings), and the
like.
Training
The process of acquiring and enhancing skills (introductory
or supplemental), knowledge, attitudes, and behaviors
necessary for the trainees (engineers and workers) to
effectively and efficiently perform their tasks better.
The objectives of training are varied depending on the
requirements of the project. Enumerated below are the
typical objectives of training:
a. To orient new recruits or workers;
b. To ensure that the project engineers and workers
know exactly their tasks;
c. To improve skills, productivity, job performance and
aptitude based on acceptable standards.
Training
The approaches of training are: on-the-job type; classroom setting, conference
method; group discussions; supervisory training, case method; and role playing.
Higher and more formal orders of training are attendance to seminars (local or
international) and going through the formal school degree programs (national,
doctoral, designers).
End of Presentation
Thank you.
PLANNING AND SCHEDULING (PERT/CPM)

Presented By:
ALIM, JANEIL S.
GARCIA, REHAN D.
PINEDA, JUAN CARLOS R.
TOLENTINO, GEOCEL A.

Adviser:
ENGR. CRISPIN S. LICTAOA
PLANNING & SCHEDULING
PLANNING
- is the process of defining the goals and objectives of a project,
determining the resources required to achieve them, and creating
a timeline for completion.

- the goal of planning is to minimize the resource expenditures

required to complete the project successfully and to ensure the
work is accomplished in a safe manner. It also includes identifying
potential risks and developing contingency plans.
SCHEDULING
- Is the process of assigning specific dates and times to tasks and
activities in a project plan. It involves allocating resources,
determining dependencies between tasks, and creating a timeline
that clearly shows when each task will begin and end.

- The goal of scheduling is to ensure that the project is completed

within the specified time-frame, while also taking into account any
constraints or limitations that may impact the schedule.
Together, planning and scheduling help project managers ensure
that projects are completed efficiently and effectively, by providing
a clear road map for the project and ensuring that all tasks are
completed on time, within budget and to the required quality
standards.
PLANNING & SCHEDULING
(PRINCIPLES)
 There are several key principles that are important to understand when planning
and scheduling a project:

▪ DEFINE THE PROJECT SCOPE: It's important to clearly define the project
scope, including the project goals, deliverable, and constraints. This
information is crucial for developing an accurate project schedule.

▪ IDENTIFY THE WORK BREAKDOWN STRUCTURE: Breaking the project into

smaller, manageable tasks and sub-tasks helps to create a clear picture
of what needs to be done and in what order.

▪ DETERMINE TASK DEPENDENCIES: Understanding the relationships

between tasks is important for determining the right order in which tasks
should be completed.
▪ DETERMINE RESOURCE REQUIREMENTS: Knowing the resources
required for each task is essential for developing a realistic project
schedule. This includes personnel, equipment, and materials.

▪ DEVELOP A PROJECT SCHEDULE: Once you have identified the tasks, task
dependencies, and resource requirements, you can develop a detailed
project schedule that includes start and end dates, duration, and
resource assignments.

▪ MONITOR AND CONTROL THE SCHEDULE: Regularly monitoring and

updating the project schedule is critical for ensuring that the project
stays on track. This includes tracking progress, making adjustments as
necessary, and keeping stakeholders informed of any changes.
▪ CONSIDER RISK: It's important to consider and plan for potential risks
that may impact the project schedule, such as unexpected events or
delays.
PERT - CPM
 PERT
(PROGRAM/PROJECT EVALUATION AND REVIEW TECHNIQUE)
PERT
- uses time as a variable which represents the planned resource
application along with performance specification. In this technique,
first of all, the project is divided into activities and events. After
that proper sequence is ascertained, and a network is constructed.
After that time needed in each activity is calculated and the critical
path (longest path connecting all the events) is determined.
PERT
- is an acronym for Program (Project) Evaluation and Review
Technique, in which planning, scheduling, organizing, coordinating
and controlling uncertain activities take place. The technique
studies and represents the tasks undertaken to complete a project,
to identify the least time for completing a task and the minimum
time required to complete the whole project. It was developed in
the late 1950s. It is aimed to reduce the time and cost of the
project.
 CPM
(CRITICAL PATH METHOD)
CPM
- Developed in the late 1950s, Critical Path Method or CPM is an
algorithm used for planning, scheduling, coordination and control
of activities in a project. Here, it is assumed that the activity
duration is fixed and certain. CPM is used to compute the earliest
and latest possible start time for each activity.

The process differentiates the critical and non-critical

activities to reduce the time and avoid the queue generation in the
process. The reason for the identification of critical activities is
that, if any activity is delayed, it will cause the whole process to
suffer. That is why it is named as Critical Path Method.
CPM
- In this method, first of all, a list is prepared consisting of all the
activities needed to complete a project, followed by the
computation of time required to complete each activity. After that,
the dependency between the activities is determined. Here, ‘path’ is
defined as a sequence of activities in a network. The critical path is
the path with the highest length.
KEY DIFFERENCES

PERT CPM
 BASIS FOR COMPARISON PERT CPM

PERT is a project management CPM is a statistical technique of

MEANING technique, used to manage project management that manages
uncertain activities of a project. well defined activities of a project

A technique of planning and

WHAT IS IT? A method to control cost and time
control of time.
ORIENTATION Event-oriented Activity-oriented
Evolved as Research &
EVOLUTION Evolved as Construction project
Development project
MODEL Probabilistic Model Deterministic Model

FOCUSES ON Time Time-cost Trade-off

ESTIMATES Three time estimates One time estimate

APPROPRIATE FOR High precision time estimate Reasonable time estimate

MANAGEMENT OF Unpredictable Activities Predictable Activities

NATURE OF JOBS Non-repetitive Nature Repetitive Nature

CRITICAL AND NON-CRITICAL ACTIVITIES No Differentiation Differentiated

Non-Research projects (e.g. Civil

SUITABLE FOR Research and Development
Construction)
CRASHING CONCEPT Not Applicable Applicable
BASIS FOR
PERT CPM
COMPARISON
PERT is a project CPM is a statistical
management technique of project
MEANING technique, used to management that
manage uncertain manages well defined
activities of a project. activities of a project
A technique of
A method to control
WHAT IS IT? planning and control
cost and time
of time.
ORIENTATION Event-oriented Activity-oriented
Evolved as Research & Evolved as
EVOLUTION
Development project Construction project
MODEL Probabilistic Model Deterministic Model
FOCUSES ON Time Time-cost Trade-off
ESTIMATES Three time estimates One time estimate
High precision time Reasonable time
APPROPRIATE FOR
estimate estimate
 Unpredictable
MANAGEMENT OF Predictable Activities
Activities
NATURE OF JOBS Non-repetitive Nature Repetitive Nature
CRITICAL AND NON-
No Differentiation Differentiated
CRITICAL ACTIVITIES
Non-Research
Research and
SUITABLE FOR projects (e.g. Civil
Development
Construction)
CRASHING CONCEPT Not Applicable Applicable
KEY DIFFERENCES
1. PERT is a project management technique, whereby planning,
scheduling, organizing, coordinating and controlling uncertain
activities are done. CPM is a statistical technique of project
management in which planning, scheduling, organizing,
coordination and control of well-defined activities take place.

2. PERT is a technique of planning and control of time. Unlike CPM,

which is a method to control costs and time.

3. While PERT is evolved as a research and development project,

CPM evolved as a construction project.
4. PERT is set according to events while CPM is aligned towards
activities.

5. A deterministic model is used in CPM. Conversely, PERT uses a

probabilistic model.

6. There are three times estimates in PERT, i.e. optimistic time (to),
most likely time ™, pessimistic time (tp). On the other hand, there
is only one estimate in CPM.

7. PERT technique is best suited for a high precision time estimate,

whereas CPM is appropriate for a reasonable time estimate.

8. PERT deals with unpredictable activities, but CPM deals with

predictable activities.
9. PERT is used where the nature of the job is non-repetitive. In
contrast to, CPM involves the job of repetitive nature.

10. There is a demarcation between critical and non-critical

activities in CPM, which is not in the case of PERT.

11. PERT is best for research and development projects, but CPM is
for non-research projects like construction projects.
 CPM
(EXAMPLES)
FIND THE CRITICAL PATH
FIND THE CRITICAL PATH USING FORWARD-BACKWARD PASS
PERT
(EXAMPLES)
FIND THE CRITICAL PATH
𝑧 = 0.76 ; 𝜓 𝑧 = 0.7764
𝑧 = 0.77; 𝜓 𝑧 = 0.7794
0.7764 + 0.7794
𝜓 𝑧 = = 0.7779 ≡ 77.8%
2

❖ 77.8% Probability of completing the subject in 26 days

GANTT CHART
 The first Gantt chart was devised in the mid-1890s by Karol
Adamiecki, a Polish engineer who ran a steelwork in southern Poland and
had become interested in management ideas and techniques.

Some 15 years after Adamiecki, Henry Gantt, an American engineer

and project management consultant, devised his own version of the chart
and it was this that became widely known and popular in western
countries.

It is one of the most popular and useful ways of showing activities

(tasks or events) displayed against time. On the left of the chart is a list of
the activities and along the top is a suitable time scale. Each activity is
represented by a bar; the position and length of the bar reflects the start
date, duration, and end date of the activity.
This allows you to see briefly:
• What the various activities are
• When each activity begins and ends
• How long each activity is scheduled to last
• Where activities overlap with other activities, and by how much
• The start and end date of the whole project
GANTT CHART
(CREATION)
There are two methods in creating Gantt Chart.
1. Forward Schedule: starting with the list of activities and a given date
follow them forward in time until you hit the given deadline.
2. Backward Schedule: look at the deadline, from that date, work in the
logical list of activities.
Steps to creating a Gantt Chart:
1. Determine Project start date and deadline.
2. Gather all information surrounding the list of activities within a project-
the Work Breakdown Structure may be useful for this.
3. Determine how long each activity will take.
4. Evaluate what activities are dependent on others.
5. Create Graph shell including the timeline and list of activities.
6. Using either Forward or Backward Scheduling, begin to add bars
ensuring to include dependencies and the full duration for each activity
GANTT CHART
(ADVANTAGES & DISADVANTAGES)
ADVANTAGES:
1. Useful tool for displaying time-based information within project.
2. Very simple to create.
3. They provide useful overview of project planning.
4. The charts are widely used and understood.
5. There are several PC software packages that allow you to build Gantt
Charts
DISADVANTAGES:
1. Does not give you the ability to visualize the exact progress of the project.
2. Does not show detailed sequence of activity.
3. Does not show critical activities.
4. Does not show precise effect of delay or failure to complete an activity on
time.
5. Does not explain the reasoning behind the chosen duration of each
activity.
S-CURVE
S-CURVE
- is a graph that shows the relevant cumulative data for your
project. The data can be costs, person-hours, etc.

- is a good communication tool and helps project managers

communicate project progress to project stakeholders.

- is a mathematical graph that represents the aggregate data for

a project. This information can be the project cost or the number
of person-hours against time.

- Typically, the s-curve tracks work progress, forecasts cash

flow, and assesses performance. The s-curve’s ability to display
real-time cumulative data and compare it with the planned
progress is the key reason for its popularity.
S-CURVE
(TYPES)
 BASELINE S-CURVE
-Before the project starts, a schedule is created to outline the
anticipated resource allocation and task sequencing. The schedule
is called the baseline schedule; the s-curve drawn from this
schedule is known as a baseline s-curve.

-This s-curve shows the project’s anticipated progress. The

baseline schedule can be revised if project parameters, such as
duration, scope, etc., change.
 TARGET S-CURVE
- A target s-curve can be produced from the production schedule,
and it represents the project’s ideal progress as though the actual
progress is the same as planned progress. In a perfect world
where a project is on budget and on time, the target s-curve would
intersect the baseline s-curve at the project’s conclusion.
 COST VS TIME S-CURVE
- The costs vs time s-curve is useful for projects that include labor
and non-labor costs such as subcontracting, hiring, and supplying
materials. It shows the total cost incurred throughout the project
life cycle and can be used to calculate the project cost and cash
flow.
VALUE AND PERCENTAGE S-CURVE
- S-curves can be plotted as absolute quantities such as values vs
time or costs or person-hours vs time. Value s-curves can be used
to calculate the number of man-hours or amount spent so far, as
well as the number of person-hours or costs needed to finish the
project.

- Percentage s-curves can be used to compare the project’s

planned vs actual completion in a percentage, the project’s
percentage growth, contraction, etc.
 MAN-HOURS VS. TIME S-CURVE
- The man-hours vs time s-curve is suitable for labor-intensive
projects and shows the number of man-hours spent on the project
over time. The man-hours is the sum of the manpower needed and
the number of hours to execute the task.
 ACTUAL S-CURVE
- This s-curve shows the actual progress, but it can be used to
compare progress with the target baseline s-curve to compare the
performance.

- The actual s-curve ends at the project’s cut-off date, which is the
last day that the production schedule is updated. The actual s-
curve meets the target s-curve at the end of the project.
THANK YOU!