Organization
• group of individual who are cooperating willingly
and effectively for a common goal.
• goals for common good or gain profit
• structured to promote better management.
Structural Organization
- arrangement of job roles or positions
Principles of Good Organization
1. Principle of Objective
- A clear and complete definition of the objective
2. Analysis – sound business judgment
3. Simplicity – The simplest organization
4. Functionalism – organization should be built
around the main function.
5. Centralization of Authority andResponsibility
-there should be centralized executive control
Limited Span of Control –number of subordinates an
executive can manage
Construction Management
• practice of ensuring that construction actions are
undertaken effectively and efficiently
• building project encompasses organizing the field
forces & back-up personnel in
• considered to be a professional services contract
and is negotiated
• done by an individual or group of individuals. It
could be a firm or a company that offers such
services.
Management Concept
1. Systematic. Things can be done better by means of
plan of action
2. Scientific. application of the scientific method,
discovered the best-known methods of
performing such operations.
3. Humanistic. Where machine may have standard
of efficiency and be set to run
Construction Manager
• may be defined as an individual, a group of
individuals, or a company that perform the
functions required in building a project as the
agent of the owner.
• As the Agent of the Owner, it is the
Construction Manager’s responsibility to report
to the owner regarding the status of the
building.
• Construction Manager’s main function is to
oversee the day-to-day progress of the
construction of the building.
Duties of a Construction Manager
1. Project Management Planning
– Planning entire project and documenting all
the jobs that must be completed.
2. Cost Management
- expenses of each project must be efficiently
managed throughout the process
3. Quality Management
– contractors employed for the project are
completing it to a high-quality standard.
4. Safety Management
- must ensure that correct processes are in place to
make sure there are no accidents.
5. It is also the Construction Manager’s duty to
evaluate billings submitted by the contractor to
the owner or developer.
Decision Making
• fundamental process of management. It is the
mental process of choosing from a set of
alternatives.
Effective Decisions
• know that one does not start with facts, one starts
with opinions
• Right decisions grow out of the clash and conflict
of divergent opinions.
Effective Managers
• are expected to make effective decisions.
1. Errors made in the Decision Process
– manager fail to appreciate the importance of
each step in the decision process.
2. Bounded Rationality
– the limit as control on making decision because of
costs, human abilities, time, technology, and the
availability of information.
Discipline
• management uses to bring employees behavior
under control.
• Its purpose is not retribution or vengeance but to
impress upon the employee that things should be
done in an appropriate manner.
 Procurement
• acquisition of goods, consulting services,
and the contracting for Infrastructure
Projects by the Procuring Entity.
Legal Basis
R.A. 9184: Government Procurement Reform
“An act providing for the
Modernization, Regulation, and
Standardization of the
Procurement Activities of the
Government and for other
Purposes”
Approved Budget for the Contract (ABC) – Refers
to the budget for the contract duly approved
by the head of the Procuring Entity.
BAC – Refers to the Bids and Awards Committee
Bidding Documents - documents issued by the
procuring entity as the basis for bid.
Bid –signed offer or proposal submitted by a
supplier, manufacturer, distributor
Competitive Bidding –method of procurement which
is open to participation by any interested party
Consulting Services – Refer to services for
Infrastructure Projects and other types of projects
or activities of the Government requiring adequate
external technical and professional expertise. G-
EPS – Refers to the Government Electronic
Procurement System
Goods – Refer to all items, supplies, materials, and
general support services, except consulting
services and infrastructure projects
GPPB – Refers to the Government Procurement Policy
Board.
Head of the Procuring Entity –head of the agency or
his duly authorized official, for national
government agencies.
Infrastructure Projects – Include the construction,
improvement, rehabilitation.
Portal –website that aggregates a wide variety of
content for the purpose of attracting a large
number of users.
Procuring Entity –any branch, department, office,
agency, or instrumentality of the government
procuring goods.
GAA (General Appropriation Act) - expenditure
program of the government agency.
Technical Working Group – created by the BAC from a
pool of technical, financial, and legal experts.
1. Competitive Bidding method of procurement
which is open to participation by any
interested party.
2. Limited Source Bidding – otherwise known as
selective bidding, method of procurement of
Goods and Consulting Services that involves
direct invitation to bid.
3. Direct Contracting – or single source
procurement, method of procurement of
Goods that does not require elaborate Bidding
Documents.
4. Repeat Order – method of procurement of
Goods from the previous winning bidder,
whenever there is a need to replenish goods.
5. Shopping – method of procurement of Goods
whereby the Procuring Entity simply requests
for the submission of price quotations.
6. Negotiated Procurement – is a method of
procurement of Goods, Infrastructure Projects,
and Consulting services, whereby the
Procuring Entity directly negotiates a contract
with a technically, legally, and financially
capable supplier, contractor or consultant.
Bid Selection Method
A. Low – Bid Selection: This selection
focuses on the price of the project.
Multiple construction management
companies submit a bid to the owner
then the owner chooses the company
with the lowest bid to complete the job
for them.
B. Best – Value Selection: This selection
focuses on both the price and
qualifications of the contractors’
submitting bids. This means that the
owner chooses the contractor with the
best price and the best qualifications.
The owner decides by using an RFP
(Request for Proposal), which provides
the owner with the contractors’ exact
form of scheduling and budgeting for
the project.
Bids
• a signed offer or proposal submitted
by a supplier, manufacturer,
distributor, contractor, or consultant
in response to the Bidding
 Documents. It gives the owner an
idea on how much money they should
expect to pay a construction company
in order for them to complete the
project.
Open Bids
• used for public projects. Any and all
contractors are allowed to submit
their bid due to public advertising.
Closed Bids
• is used for private projects. A
selection of contractors are sent an
invitation for bid so only them can
submit a bid for the specified project.
Two Envelope System Bidding
a. First Envelope – Encloses eligibility
and technical information /
documents containing one original
copy and two photocopies (properly
labeled as copy no. 1 and copy no. 2)
b. Second Envelope – Financial
information/documents containing
one original copy and two
photocopies (also labeled as copy
no. 1 and copy no. 2)
P.D. 1594
A Prescribing Policies, Guidelines, Rules and
Regulations for Government Infrastructure
Contracts
1. Bid Solicitation
In this step, the project owner or general
contractor sends out the invitation for bid (IFB),
request for proposal (RFP), or request to tender
(RTT). These documents will describe the project
in detail.
Project Delivery Method
▪ Is a system used by an agency or owner
for organizing and financing design,
construction, operations,
maintenance
1. Bid Solicitation – Project Delivery Methods
a. Hard Bid (Design-Bid-Build)
• Design-Bid-Build is the most commonly
used method for completing
construction projects and is probably
what comes to mind when most people
think about the construction process. As
its name suggests, this delivery method
consists of three distinct phases: the
design phase, the bid phase, and the
build phase.
• During the bid phase, general
contractors will review construction
documents, confer with any needed
subcontractors, and ask the architect or
engineer clarifying questions in order to
prepare their bid.
• Once the winning bid has been selected,
the build phase begins, and the general
contractor’s team can get to work
constructing the new facility. A unique
feature of the Design-Bid-Build method
is that the designer will oversee the
work of the general contractor and
subcontractors.
Lack of Transparency
• The owner/client does not normally see
those bids submitted by subcontractors
to the general contractors
b. Construction Management Agency
• In this method, the owner hires both the
designers (Architects/ Engineers) and
the Construction Management Agency
at the very beginning of the project. The
owner hires these firms based on their
qualifications not the lowest bid.
Design – Build is the most collaborative of these
methods. The design – builds calls for the contractor and
design team to work together under a single contract.
Bid Solicitation – Contract Types
a. A Lump Sum contract
• A Lump Sum contract sets one
determined price for all work done for
the project. This type of contract is also
and called “fixed price” or “stipulated sum”
contracts.
• Incentives are sometimes built into
these contracts to reward the builder if
the job is completed ahead of schedule.
These agreements can also include
penalties, sometimes called “liquidated
damages,” for a job that is completed
late. Owners typically use these types of
 contracts to steer clear of change orders
for any additional or otherwise
undetermined work.
b. Cost Plus
• Cost plus contracts normally require the
owner to pay for all project expenses, like
the cost of materials, labor, and any other
projects costs. Additionally, these types of
contracts will also include an agreed-upon
amount or percentage that covers the
builder’s overhead costs and profit that the
owner also pays.
• Depending on the type of cost-plus
contract, the owner may end up paying
more than anticipated and therefore
generally takes on more risk than the
builder.
a. Cost plus fixed percentage: Payment
covers both the associated project costs
and the builder’s profit and overhead. The
amount paid for the builder’s profit and
overhead is dependent on a fixed
percentage of the project cost.
Cost plus fixed fee: Payment includes coverage of the
associated project’s costs as well as a fixed fee that
covers the builder’s profit and overhead.
b. Cost plus with guaranteed maximum
price (GMP) contract: Payment
includes the coverage of the associated
project costs and a fixed fee that is paid
up to a maximum cost. If the GMP is
not reached, the difference between
the total cost and GMP will not be paid
out, which results in savings for the
owner. The builder and owner may
also agree to split the savings,
providing the builder an incentive to
keep costs under the GMP.
2. Contracting / Subcontracting
• After the owner sends out a bid
solicitation, the subcontractors will
review the project scope. Then, the
subcontractors will bid for certain areas
of work. This could include bidding for
different specializations such as
interior design, painting, flooring,
plumbing, landscaping, roofing, or
electrical works. Depending on the
project delivery method, the
subcontracting phase can occur before
or after the general contractor has won
the bidding.
3. Bid Submission
• As the name suggests, this is where
Contractors/ Subcontractors submit
their bid package to the project owner
before the deadline. While it can be
tempting for some contractors/
subcontractors to submit their bid
packages in the rush to meet the
deadline, it holds a risk of inaccuracy.
In the end, they might not have
reviewed the documents properly. On
the owner’s side, it would be best to
have the bid package reviewed
thoroughly
4. Bid Selection
• The bid selection is the most important
part of the bidding process. From here,
the owner or the general contractor
scrutinizes that packages and awards
the bid to the subcontractors who offer
the best value. In many cases, the
decision will heavily rely on the lowest
price. However, the owner must
remember that the lowest bid price
should never be the finalizing factor in
the selection.
5. Contract Formation
Although the bid has been awarded at this point, the
contract formation must be completed. This is where
the legal groundwork is finalized. At this point in the
construction bidding process, the contract has
already been established. However, there is still an
opportunity for the subcontractors to negotiate on
the final pricing and other terms of the contract. The
owner and the contractor must all come to an
agreement and sign the contract before the actual
project can begin.
1. Project Delivery
This is the final part of the construction bidding
process. This is when the actual project building
commences. Every aspect of the project must go on
according to the legal terms that were agreed on
during the contract formation. While it’s true that
the agreed-upon timelines are subject to change, it
is the duty of the contractors to ensure the project is
completed smoothly. Here, the owner must be fully
informed regarding how the project is being
completed. The project delivery phase further
stresses the importance of the bid selection
decision. Choose only the contractor that will truly
deliver the best value for your project.
PERT
Program Evaluation and Review Technique.
CPM
Critical Path Method
PERT and CPM were developed
independently in the late 1950s. These two are
networks. A techniques used for planning and
coordinating large scale projects.
The use of PERT began in 1958 through
the efforts of Lockheed Aircraft, the U.S. Navy
Special Project Office and the consulting firm of
Booz, Allen, & Hamilton in the efforts of the U.S.
Government to speed up the Polaris Missile
Project.
2. Program Evaluation and Review Technique
The Polaris Missile Project is a large one
involving over 3,000 contractors and 11,000
subcontractors with several thousands of work
Activities. The use of PERT in this large-scale
project was proven successful in shortening the
length of the project completion time.
It states that:
“The program of work shall include, among
other things, estimates of the work items,
quantities, costs, and a PERT/CPM network of
the project activities… in the preparation of
the bidding documents, that government shall
make and estimate the actual number of
working days required to complete the project
through PERT/CPM analysis of the project
activities and corrected for holidays and
weekends.”
Prior to the development of PERT, in 1956,
the Critical Path Method which is simply called
CPM was developed by J.E. Kelly of the Remington
Rand Corp. and M.R. Walker of Du Pont in an
effort by commercial industry to make an
advanced scheduling and cost control methods.
CPM was a designed tool for planning,
scheduling, and control of construction work. Its
emphasis was on the work or activities to be
managed. The network diagram defined and
focused attention on the job to be accomplished.
PERT was developed as a result of looking
for an improved method of planning and
evaluating progress of a large-scale research and
development program. It was designed to provide
the management a periodic reporting of current
status of projects.
Difference between PERT & CPM
1. Critical Path Method (CPM)
– is mainly used in projects to determine
critical as well as non-critical tasks that
will help in preventing conflicts and
reduce
bottlenecks.
– In essence, CPM is about choosing the
path in a project that will help in
calculating the least amount of time
that is required to complete a task with
the least amount of wastage.
(PERT)
– is a management planning tool used to
calculate the amount of time it will
take to realistically finish a project.
– PERT is an activity to understand the
planning, arranging, scheduling,
coordinating, and governing, of a
project. This program helps to
understand the technique of a study
taken to complete a project, identify
the least minimum time is taken to
complete the whole project.
In all major projects, of the government,
PERT and CPM network is a mandatory
requirements.
Under the PD 1594, Prescribing Policies,
Guidelines, Rules, and Regulations for
government infrastructures contracts give a
certain provision.
On January 27, 1968, Pres. Ferdinand
E. Marcos issue memorandum circular no. 153
which provides that:

Three Phases of PERT/CPM
Planning
• is defined as determining the relationship
between the work operation and the
sequence in which they are to be
performed. Scheduling or sequence
involves distribution of work time to
each
The Critical Path Method offers the solution
to such problem through systematic
approach.
Planning
• In any project construction undertaking,
planning is the most important
consideration
Scheduling
is defined as the process of translating the arrow
diagram into time table of calendar days.
Controlling and Monitoring
• Flexibility and updated re-
computations brought about by
changing conditions is the key to a
successful network programming.
There are two slightly different conventions for making a
network diagram. They are:
1. Activity on Arrow (AOA) – that is using
arrows to designate activities.
2. Activity on Node (AON) – using nodes to
designate activities.
The nodes in AOA approach represents the
beginning and the end of activities, which are called
event. Events are point in time. Unlike activities,
they do not consume either resources or time.
a. Every arrow represents an item of work and is
called Activity.
b. An Event is the starting point of an activity
represented by a circle, square or any
geometrical form.
c. An Activity is dependent upon and cannot begin
until after the completion of all preceding
activities.
1. Activity – is the work operations required to
complete a task or in some cases, a segment of
that task. In short, it is the actual work
between events.
2. Events – is a point in time signifying the
beginning or end of one or more activities. It
denotes the completion of all preceding or
predecessor activities and the beginning of one
or more succeeding activities.
Dummy Activity
• Is an arrow on a network showing the
dependent relationship between two
activities. However, dummy activity
does not represent actual work
efforts, and do not consume time.
Duration of an activity
• Is the time it takes an activity to be
finished. In short, this is the normal
time duration of a task. Duration
activity is the span of time from the
Early Start to its early finish or from its
Late Start to its Late Finish.
Path
• is a sequence of activities that leads
from the starting node the to the
finishing node.
Early Start – Is the earliest time that an
activity can occur. It is the first day after the
physical assumption of the activity.
Earliest Finish – Is equal to its Earliest Start plus its
duration or time.
Critical Path – It is the longest route in the
network of activities representing a project. The
sum of the activities duration along this route is the
duration of the project.
Earliest Event – Is the earliest the occurrence of
an event sometimes called Early Event Time or
Earliest Event Time. It is the earliest time an event
can happen without delaying the Earliest Start of
any activity.
The Earliest Start of an activity cannot be
earlier than the earliest event time of the event.
It will always be equal to the Earliest Event.
Dummy Activity
• Is an activity which does not consume
 any kind of resource but merely depicts
the technological dependence is called a
dummy activity.
• are used in an AOA approach to
establish complex relationships
between activities which cannot be
establish otherwise. A dummy activity is
represented by dotted lines in a
network diagram
For the Critical Path:
• The critical path is the longest path of
the network diagram. The activities in
the critical path have an effect on the
deadline of the project. If an activity of
this path is delayed, the project will be
delayed.
The critical path is indicated by activities with Zero
Float Time. Float is the term used for those activities
which do not fall on the critical path.
Optimistic Time – is the estimated minimum time
an activity will take. This is the expected activity
duration when all the breaks are right. Its
probability is about 1 in 100 or 1% represented by
letter 𝒂.
Most Likely or Probabilistic Time – is the
estimated normal length of time an activity takes.
This is the time expected that will most frequently
be required for an activity. It is represented by
letter 𝒎.
Pessimistic Time – Is the estimated maximum
time that will be required under the worst
conditions. Its probability is about -1 in 100 or -1%
represented by letter 𝒃.
The ET or the Estimated time is calculated
as a weighted average. It is an average resulting
from multiplication of each component by a factor
reflecting its importance.
• Safety – a state in which hazards and
conditions leading to physical,
psychological, or material harm are
controlled in order to preserve the health
and well-being of individuals
• Hazard – Are unsafe practices or
conditions that if not controlled may
result into the occurrence of an accident
or an incident
• Risk – A chance of physical and personal
loss based on the exposure to the hazard.
• Incident – Referred to as work-related
event in which an injury or ill health
(regardless of severity) or fatality occurred
or could have occurred
• Accident – It is an undesired event that
results in harm to people, damage to
property or loss to process
• Near-miss – is an incident where no injury
or illness occurs.
Therefore, an incident can be either or a near-miss
• Unsafe Practices/Act – Are behaviors
which could permit the occurrence of an
accident or incident. Deviation from
standard procedures or practices.
• Unsafe conditions – are circumstances
which could permit the occurrence of an
accident or incident. Deviation from
standard conditions.
• Safety Program – Are activities designed
to assist management and employees in
the recognition, evaluation, and control of
workplace hazards.
• Safety Audit – Is a critical examination of
the safety and health management
programs to determine their effectiveness
and compliance to regulatory.
• Personal Protective Equipment (PPE) –
Are devices used to protect a worker from
an injury or illness resulting from contact in
the workplace hazards.
Construction Reporting
• There are several items that a project team
needs to be aware of continuously. Though
people can share this information through
other communication channels such as
word of mouth and email, there is an easier
and better way to have consistent data,
and this is through construction reporting.
• These reports are further shared in paper
form or email to the relevant project
stakeholders.
Purpose of a Construction Report
a means to understand the activities taking place in
project sites. Construction reporting employs various
tools to gather and integrate project information to
paint the right picture of the project status.
Types of Construction Report
1. Materials Report progress of a project. - These reports
– Advancements in technology have explain the details of the site and keep
brought about new technologies that the stakeholders informed
contractors can adopt in construction.
Therefore, material reports give
What to Include in a Daily Report
construction companies insights into
materials that offer better cost savings
and provide a longer lifespan. Various
▪ Job Details: This section should include
project specifics such as the date, job
organizations provide information on
name, job type, and job number. Usually, it
these construction material reports,
also has a brief description of the job.
and construction firms need to enroll
in them to get these services.
▪ Material, labor, and equipment log: It is
best to record the members present on
2. Trend Report
site. This makes it easy to solve any arising
– are standard in the construction
problems with attendance or payroll. The
industry, and they give information on
construction report also documents the
different construction types and
materials on-site and the amounts used.
whether their adoption is increasing or
decreasing in the market. Various
▪ Material deliveries: The construction
websites update construction trend
manager should record any new material
reports, and if contractors want to be
deliveries to the site. The information here
privy to such information, they need to
should include the type of material, and the
subscribe to the websites. Most of
quantities delivered. If a material was
these reports are produced on an
scheduled for delivery but not delivered, it
annual basis, and they give good
should be recorded as a potential delay
overviews of the latest trends and
event.
market dynamics.
▪ Meetings: Sometimes, construction
3. Cost Report
meetings occur off-site. However, when
– These are construction reports that
they occur on-site, the session should be
inform a client and other concerned
recorded, and the decisions arrived at on
parties on the magnitude of a project's
the panel. Even if there were no critical
predicted and actual costs. Cost
deliberations, the construction manager
consultants such as quantity surveyors
should note that the meeting happened
or contractors generally prepare cost
and include the names of the people in
reports. The project is then built
attendance.
according to the cost report presented
to the client. These reports are
▪ Site conditions: The construction report
updated regularly to keep project costs
should log the site conditions and outline
in check. Cost reports constantly
the weather aspects such as wind speeds,
evolve throughout a project's lifecycle.
precipitation, and temperature.
Therefore, the level of detail and
accuracy improves as the availability of
▪ Potential risks: The daily report needs to
information increases in the project's
outline risks and causes for possible delays.
life.
▪ Accidents: The priority for all contractors is
4. Progress Report
safety. However, it is essential to report it
– Daily reports are some of the essential
in an incident. This will help when averting
aspects of project management. Just as
similar incidents in the future.
it sounds, a daily report outlines
activities in a project daily. Daily
reports supplement a contract by
documenting and verifying the
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