The

Construction
Industry
Cagayan State University
Civil Engineering
1

Engr. Raiza B. Camma

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 Unit 1: History and Basic Concepts
The construction industry has been referred to as the engine that drives the overall economy. It represents one
of the largest economic sectors of most countries. The spectrum of work ranges from the construction of large power
plants and interstate highways costing billions of dollars to the construction of single-family houses and the paving of
driveways and sidewalks. The quality of life available one country depends on how developed its infrastructure is.

Learning Outcomes:
At the end of the topic, the learners are expected to:

1. Understand the construction industry, its process, characteristics , principal project phases
2. Identify, describe, and discuss the types of project delivery methods, contracts, organization Structures

1.1 History of the Construction Industry

(Figure 1.1) The Egyptian Pyramids (Figure 1.2) The Parthenon

The existence of construction industry began in prehistoric times, when our ancestors discovered their ability to
build things. Humans struggled to survive and sought shelter from the elements and the hostile environment that
surrounded them by building protective structures. Using natural materials such as earth, stone, wood, and animal
skins, humans were able to fabricate housing that provided both shelter and a degree of protection.
As society became more organized, the ability to build things became a hallmark of the sophistication of ancient
civilizations. The wonders of the ancient world reflect an astounding ability to build not only structures for shelter but
also monuments of gigantic scale. The pyramids (Figure 1.1) and Greek temples such as the Parthenon (Figure 1.2) are
impressive testimony to the building skills of the civilizations of antiquity. Great structures punctuate the march of
time, and many of the structures of ancient times are impressive even by modern standards.
In modern times, the Eiffel Tower (Figure 1.3) and the Panama Canal (Figure 1.4) stand as legendary feats of
engineering achievement. They are also testimonies to the fact that realizing a construction project involves solving a
multitude of problems, many of which are not technical. In both projects, people problems requiring great innovation
and leadership were just as formidable as the technical problems encountered. To solve them, the engineers involved
accomplished ‘‘heroic’’ feats.
Moreover, the history of the construction industry is the basis of the different nations and governments in
setting the rules and regulations about any transactions in the industry. Obviously, the nation will not prosper without
the construction industry even in today’s modern world.
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 (Figure 1.3) The Eiffel Tower (Figure 1.4) The Panama Canal

https://alansfactoryoutlet.com/wp-content/uploads/2021/02/tallest-buildings-structures-world-throughout-history-8.png

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 1.2 CONSTRUCTION PROCESS VERSUS
MANUFACTURING PROCESS
Manufactured products are typically designed and produced without a designated purchaser. In other words,
products (e.g., automobiles or TV sets) are produced and then presented for sale to any potential purchaser. The
product is produced on the speculation that a purchaser will be found for the item produced. A manufacturer of
bicycles, for instance, must determine the size of the market, design a bicycle that appeals to the potential purchaser,
and then manufacture the number of units that market studies indicate can be sold. Design and production are done
prior to sale. To attract possible buyers, advertising is required and is an important cost center.

However, in construction, the purchaser approaches a set of potential contractors. Once agreement is reached
among the parties (i.e., client, designer, etc.) as to the scope of work to be performed, the details of the project or end
item are designed and constructed. Purchase is made based on a graphical and verbal description of the end item,
rather than the completed item itself. This is the opposite of the speculative process where design and manufacture of
the product are done prior to identifying specific purchasers. A constructed facility is not commenced until the
purchaser has been identified. It would be hard to imagine, for instance, building a bridge without having identified the
potential buyer. (Can you think of a construction situation in which the construction is completed prior to identifying
the buyer?)

While the manufacturing industry exhibit high-quality products, timelines of service delivery, reasonable cost of
service, and low failure rates, the construction industry, on the other hand, is generally the opposite. Most projects
exhibit cost overruns, time extensions, and conflicts among parties. Because of the one-of-a-kind unique nature of
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construction, there are many complex issues that can lead to failure to complete the project in a functional or timely
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manner. The number of stakeholders and issues that must be dealt with prior to project completion leads to a complex
level of risk for all parties involved (e.g., designer, constructor, government authorities, real estate brokers, etc.)

1.3 The Need for Project Management

In general, the construction industry is more challenging than other industries due to:

• its unique nature;

• every project is one-of a kind;
• many conflicting parties are involved;
• projects are constrained by time, money and quality; and high risk

A project is defined, whether it is in construction or not, by the following characteristics: -

• A defined goal or objective.

• Specific tasks to be performed.
• A defined beginning and end.
• Resources being consumed.

Q: What makes a construction project unique?

A: Uncertainties

1. The competitive tendering process

2.
3.
The company’s turnover
Site production rates Variable
4. Weather

To reduce variability, the best-run company needs to be controlled

“The Construction by:

1. Planning and Setting Targets

Industry is an Uncertain 2. Choosing Methods to achieve such plans and targets
3. Monitoring Progress
Industry.” 4. Taking Corrective action when necessary
Continual Monitoring and Revision is ultimately the only way to
cope with uncertainty and variability.

The goal of construction project is to build something. What differentiate the construction industry from other
industries is that its projects are large, built on-site, and generally unique. Time, money, labor, equipment, and,
materials are all examples of the kinds of resources that are consumed by the project. Projects begin with a stated goal
established by the owner and accomplished by the project team. As the team begins to design, estimate, and plan out
the project, the members learn more about the project than was known when the goal was first established. This often
leads to a redefinition of the stated project goals.
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 1.4 STRUCTURE OF THE CONSTRUCTION INDUSTRY
Construction projects can be broadly classified as

• Building Construction
• Heavy Engineering Construction
• Industrial Project:

Building Construction:
During design phase, building design is coordinated by
architect who works with other engineering disciplines such
as structure engineer, electrical engineer whereas
construction phase is coordinated by the civil engineers.

Building project can further be classified into

1. Residential Building (Figure 1.6) Building Construction
2. Commercial and other buildings.
Economically building project accounts for most of construction project in a country. But most of the constructions are
carried out in an unorganized way. In the Philippines, building construction projects are very fragmented and majority
of construction in rural and semi urban area is carried out by non-engineering ways. Building construction in
Philippines is highly labor–intensive. Most of the laborers employed for building projects are semi-skilled and
untrained. Uses of heavy equipment are very rare. Building projects are governed by many local as well as general
laws, such as municipal laws, building laws etc.

Heavy Engineering Construction:

Heavy engineering construction includes primary

infrastructural facilities such as transportation system,
hydraulic structure, water treatment and water supply
system, waste water treatment and its disposal, power line
transmission.
(Figure 1.7) Dam Construction
Heavy engineering construction accounts for around 25-30 percent of total construction.
Construction is carried out by reputed big company.
Heavy engineering projects are mostly financed by government. These are primarily infrastructural projects.
Design as well as construction in these projects is the primary job of civil engineers although inputs from other
departments play an important role.
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Heavy engineering project are highly equipment intensive and large quantities of materials are used.
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Industrial Project:

Industrial Projects are highly specialized projects and it

is dominated by large construction firms.
These projects include power plants (fossil fuel, nuclear
power), petroleum refineries and petro-
chemical plants, fertilizer plants, large steel
plants, heavy manufacturing plants, aircraft
industry.
(Figure 1.8) Power Plant Construction

Industrial constructions are very specialized job and consists of large complex mechanical, electrical,
instrumentation work.
Construction is dominated by skilled labor and quite labor intensive compared to heavy engineering but large
equipment are also used.

1.5 CONSTRUCTION PROJECTS PARTICIPANTS

A. The Owner (The Client)
The owner is the individual or organization for whom a project is to be built under a contract. The owner
owns and finances the project. Depending on the owners’ capabilities, they may handle all or portions of
planning, project management, design, engineering, procurement, and construction. The owner engages
architects, engineering firms, and contractors as necessary to accomplish the desired work. Public owners
are public bodies of some kind ranging from agencies from the national level to the municipal level. Most
public projects or facilities are built for public use and not sold to others. Private owners may be
individuals, partnerships, corporations. Most private owners have facilities or projects built for their own
use or to be sold, operated, leased, or rented to others. In order to achieve success on a project, owners
need to define accurately the projects objectives. They need to establish a reasonable and balanced scope,
budget, and schedule. They need to select qualified designers, consultants, and contractors.

B. The Design Professionals

Examples of design professionals are architects, engineers, and design consultants. The major role of the
design professional is to interpret or assist the owner in developing the project’s scope, budget, and
schedule and to prepare construction documents. Depending on the size and sophistication of the owner,
the design professional can be part of the owner’s group or an independent, hired for the project. In some
cases design professional and construction contractor together form a design-build company. Architect: An
architect is an individual who plans and design buildings and their associated landscaping. Architects mostly
rely on consulting engineers for structural, electrical, and mechanical work. Engineer: The term engineer
usually refers to an individual or a firm engaged in the design or other work associated with the design or
construction. Design engineers are usually classified as civil, electrical, mechanical depending upon their
specialty. There are also scheduling, estimating, cost, and construction engineers. Engineering-Construction
Firm: An engineering-construction firm is a type of organization the combines both architect/engineering
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 and construction contracting. This type of company has the ability of executing a complete design-build
sequence.

C. The Construction Professionals

The constructions Professional are the parties that responsible for constructing the project. In traditional
management where the owner, design professional, and contractors are separate companies, the
contractor would be termed a prime contractor. The prime contractor is responsible for delivering a
complete project in accordance with the contract documents. In most cases, the prime contractor divides
the work among many specialty contractors called subcontractors as shown in Figure 1.9.

(Figure 1.9) Sample Contractor Hierarchy

D. The Project Manager

The project manager is the individual charged with the overall coordination of the entire construction
program for the owner. These include planning, design, procurement, and construction. Among his/her
duties: - Clear definitions of the goals of the project. - Investigate alternative solutions for the problems. -
Develop a detailed plan to make the selected program reality. - Implement the plan and control the
project.

Construction Manager:
The construction manager is a specialized firm or organization which administrates the on-site erection
activities and the consulting services required by the owner from planning through design and construction
to commissioning. The construction manager is responsible for design coordination, proper selection of
materials and methods of construction, contracts preparation for award, cost and scheduling information
and control.
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1.6 THE PROJECT LIFE CYCLE E.

The project life cycle

may be viewed as a
process through which
a project is
implemented from
beginning to end. This
process is often very
complex; however, it
can be decomposed
into several stages as
indicated by the
general outline in
Figure 1.10. The
solutions at various
stages are then
integrated to obtain
the final outcome.

All stages from

conceptual planning
and feasibility studies
to the acceptance of a
facility for occupancy
may be broadly
lumped together and
referred to as the
Design/Construct
process, while the
procurement and
construction alone are
traditionally regarded
as the province of the
construction industry.
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(Figure 1.9) Project Life Cycle

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The project phases can be summarized as follows:
1. PRECONSTRUCTION PHASE
The preconstruction phase of a project can be broken into conceptual planning, schematic design, design
development, and contract documents.
• Conceptual design:
Very important for the owner.
During this stage the owner hires key consultants including the designer and project
manager, selects the project site, and establish a conceptual estimate, schedule, and program.
The owner must gather as much information as possible about the project.
The most important decision is to proceed with the project or not.
• Schematic design:
During this phase, the project team investigates alternate design solutions, materials and
systems.
Completion of this stage represents about 30% of the design completion for the project.
• Design development:
Designing the main systems and components of the project.
Good communication between owner, designer, and construction manager is critical during
this stage because selections during this design stage affect project appearance, construction and
cost.
This stage takes the project from 30% design to 60% design.
• Contract documents:
Final preparation of the documents necessary for the bid package such as the drawings,
specifications, general conditions, and bill of quantities.
All documents need to be closely reviewed by the construction manager and appropriate owner
personnel to decrease conflicts, and changes.
With the contract documents are almost complete; a detailed and complete cost estimate for
the project can be done.

2. PROCUREMENT PHASE (BIDDING AND AWARD PHASE)

The project formally transits from design into construction. This stage begins with a public advertisement
for all interested bidders or an invitation for specific bidders.
• In fast-track projects, this phase overlaps with the design phase.
• If the project is phased, each work package will be advertised and bid out individually.
• It is very important stage to select highly qualified contractors. It is not wise to select the under-
bid contractors.
• Final preparation of the documents necessary for the bid package such as the drawings,
specifications, general conditions, and bill of quantities.
• All documents need to be closely reviewed by the construction manager and appropriate owner
personnel to decrease conflicts, and changes.
• With the contract documents are almost complete; a detailed and complete cost estimate for the
project can be done.

3. CONSTRUCTION PHASE
The actual physical construction of the project stage.
• This stage takes the project from procurement through the final completion.
• It is the time where the bulk of the owner’s funds will be spent.
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• It is the outcome of all previous stages (i.e., good preparation means smooth construction).
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 • The consultant will be deployed for contract administration and construction supervision. -
Changes during construction may hinder the progress of the project.

4. CLOSEOUT PHASE
Transition from design and construction to the actual use of the constructed facility.
• In this stage, the management team must provide documentation, shop drawings, as-built
drawings, and operation manuals to the owner organization.
• The as-built drawings are the original contract drawings adjusted to reflect all the changes that
occurred.
• Assessment of the project team’s performance is crucial in this stage for avoiding mistakes in the
future.
• Actual activity costs and durations should be recorded and compared with that was planned. This
updated costs and durations will serve as the basis for the estimating and scheduling of future
projects.

1.7 EXERCISES
1. There have been many construction marvels in human history, of which this chapter only mentioned a few.
Comment on three historical projects of your choosing that were not discussed here. Examples include the
Great Wall of China, the pyramids, the Suez Canal, the Eiffel Tower, and the Golden Gate Bridge, among
many others. Why were they built? What makes them unique? How were they built? Who paid for them?
2. State if True (T) or False (F):
a. The amount of information that a project manager must consider increases as a project moves towards
completion.
b. Dams, bridges, and highways would be classified as commercial building projects.
c. In the construction phase of the project, the owner needs to be heavily involved.
d. The construction project must have a defined goal or objective.
e. The construction project must have a defined beginning and end.
f. The main objective of the Owner is to win the job, finish it in a reasonable time, with maximum profit
and reasonable quality.

3. Site selection and financing would be the responsibility of which project member
a. Owner
b. Designer
c. Construction project manager
d. Subcontractor
4. This Category of projects is often funded by public pounds and is termed “infrastructure”.
a. Residential
b. Commercial building
c. Heavy engineering
d. Industrial
5. Which of the following is not a characteristic of a project?
a. Having a specific goal
b. Having a defined beginning and end
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c. Resources being consumed

d. usually being performed only once
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 e. Never being found outside the construction field

6. The advertising for contractors and review of contractors’ bids occurs during which project phase.
a. Procurement
b. Design
c. Construction
d. Conceptual planning
7. As-built drawings, warranties, and operation manuals are all provided to the owner during which project
phase.
a. Design
b. Conceptual planning
c. Construction
d. Project closeout
8. As project moves on in time, the ability to change the project become ______ difficult and ____expensive.
a. more, less
b. less, less
c. more, more
d. less, more
9. What are the main types of construction?
10. Briefly describe the project life cycle.
11. “As the project progress, the ability of the change decreases while the cost of the change increases”,
comment on this statement and show your answer using a schematic diagram.
12. List 10 subcontractors that can be engaged in building project.

1.8 References
1. Construction management / Daniel W. Halpin, Bolivar Senior. – 4th ed.
2. A guide to the project management body of knowledge (PMBOK guide) / Project Management Institute 6th
Edition (2017) by Project Management Institute

Fun Fact:
The top of the Philippine
Arena was built first. Unlike
the conventional construction
order where buildings are
built from bottom to top.
To learn more:

https://www.youtube.com/watch?v=EA
Nejrn5o58
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