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Dr. Mohammed ABUNEMEH
CONSTRUCTION CONTRACTS
COST ESTIMATE AND SPECIFICATIONS
An Najah National University
Faculty of Engineering
Course Description
The course is designed to give students, a working
knowledge of construction contracts, contractual
relationships within the construction industry and
fundamentals of construction specification writing.
Course Outline
Introduction
Elements of the total construction project cycle and processes.
project delivery methods,
Construction contracts types
bidding process
Contract documents
Type of bonds
Specifications
Drawings
General Conditions
Course Outline
Claims
Dispute resolution
Quantity surveying
Estimating construction cost
Pricing
Grading System
 Grading policy for this course will be based on the following:
 Project 20%
 Midterm Exam 30%
 Final Exam 50%
Text Book & References
 Text Book:
 Estimating Construction Cost, Robert R. Peurifoy
 Edward Fisk and Wayne Reynolds, "Construction Project
Administration", 9th edition
 References:
 Smith, Currie & Hancock (2005) Common Sense Construction
Law. 3rd Edition, John Wiley and Sons, Hoboken , New Jersey
 Hinze, Jimmie (2003) Construction Contracts. 3rd Edition,
McGraw-Hill Book Company, New York.
Aims and Objectives
 At the completion of this course, the student will:
 Describe the relationships between the parties in the construction
process (the owner, contractor, and architect) as well as their
roles, duties, and responsibilities.
 Understanding the projects delivery systems and different
contracts organizations. And understanding the different
construction contracts types, documents and specifications.
 Understanding the various bidding procedures and ability to
prepare bid documents and contract documents, in addition to
ability to understand the types of bonds.
Aims and Objectives
 At the completion of this course, the student will:
 Ability to estimate various cost components in construction
projects.
 Understand the quantity surveying techniques and methods.
Introduction
 Definition of Terms:
 Construction Management
 Construction Contracting
 Construction Administration
 One-to-One Concept (in organization)
Construction Management
 Construction:
The process by which material, equipment,
machineries are assembled into a permanent facility.
 Management
The planning, directing, and controlling of resources
(Material, Manpower, Machines, Money) to achieve
the desired goal (Time, Cost, Quality)
Construction Contracting
 Contracting:
The legal and business activities needed for initiating,
executing, and terminating a construction contract.
Construction Administration
 Construction Administration:
 Closely related to construction management.
 Can be defined as the implementation of construction
management principles.
Construction Administration
 Covers the following area:
 Planning and Scheduling
 Business and communication system
 Material control
 Payment procedure
 Changes to the work
 Inspection and acceptance
One-to-One Concept
 Previous Administration functions involve different
parties (Owner, contractors, Engineers)
 To minimize confusion, conflicts, claims, use:
One to One concept
 Each party has a single representative who
communicates important project information and
orders.
Classification of Construction Projects:
 By Size: Small, Medium, Large, Mega.
 By Ownership: Private, Public, Military.
 By Usage: Residential, Commercial, Industrial,
Utility. (Usage can be expanded to subcategories).
 By Scope (preferred):
 Building (Residential, non residential), emphasis
on aesthetics.
 Engineering (Highway, Heavy, Utility) emphasis
on function
 Industrial: emphasis on production
The Construction Participants
 Three key players in the game:
 The client (or Owner or stakeholder)
 The A/E or consultant
 The contractor (or Constructor or Builder)
Relationship Among Parties
Owner
General
Contractor
Subs
A/E
Project
contract
contract
own
Design
build
build
contract
The Owner
The owner, (also called the client)
A client maybe an individual.
A group of people.
A partnership.
A limited liability company.
A local or central government authority
The Owner
The owner is responsible for:
Funding and paying bills for the construction of project.
Determining what the project will include (also called the
scope of the project), when the project can begin and must
end (the schedule),
Receive the ultimate benefits of the finished project.
The Owner
 Owner organizations can be broken into two major categories,
public and private.
 A public agency exists for the ultimate benefit of the
citizens, the general public. Examples of public projects:,
an highway, or an Universities, schools.
 A private organization can be described as any individual,
partnership, corporation, or institution that builds a project
for its own use or for resale.
 The owner enters into separate contract with Architect and
contractor.
The Design Professional
The consultant is a party of the contractual relationship has
professional skills in engineering whether civil, structure,
architectural, mechanical. Etc.
Who acts in behalf of the client.
The Design Professional
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 that
will be used by the construction contractor to build the project.
The architect typically sub-contracts portions of work to other
design professionals such as structural engineers, landscape
architects, electrical & mechanical engineers
In almost all cases the design professional is a licensed, registered
professional who is responsible for the physical integrity of the
project.
The Contractor
 A contractor is an individual or an entity that enters into a
contract with the owner to carry out the construction work.
 If only one contractor is appointed he may be known as the
main/prime contractor.
The Contractor is responsible for the interpretation of the
contract documents into physical facility. Transform idea to
reality
The Contractor
In most cases the prime contractor divides the work among
many specialty contractors called subcontractors. On a large
project these subcontractors may also divide up the work into
even smaller work packages
In a traditional arrangement where the owner, design
professional, and contractor are separate companies, the
contractor is termed a prime contractor and is contractually
responsible for delivering a completed project in accordance
with the contract documents.
The Subcontractors
 A contractor assigned and work under the supervision of the
main contractor and who has special skills, experiences and
equipment to deal with specialized aspects of the work.
 Nominated subcontractor
 Non-nominated subcontractors
Project Life Cycle
The major phases in the project cycle that are common to
most design and construction projects are:
Project Planning
Design
Schematic Design
Design Development
Contract Documents
Construction Procurement (Bidding Phase)
Construction
Occupancy
Project Planning Phase
 During this phase of the project the owner makes decision that
set the tone for the project. All projects begin with an idea or a
need
During this stage the owner :
Selects the project site, and
Establishes a conceptual estimate, schedule.
The most critical decision that is made during this project
phase is to make a decision as to whether or not to proceed
with the project (called a go/no go decision).
Project Planning Phase
Phase activities:
Feasibility studies
Facility programming
Budgeting
Project delivery system selection
Scheduling
Site selection/acquisition
Site investigation
Financing
Design services procurement
Design Phase
Design process involves:
Schematic Design
Talk to owner, rough sketches
Design Development
Major Systems & component selected
Contract Documents
Preliminary Cost estimate
Develop Preliminary working drawings
Develop working drawings with Specifications
Schematic Design
The A/E reviews and evaluates the owner’s program and budget
requirements and discusses with the owner alternative approaches to
the design and construction
During schematic design, the A/E prepares conceptual design
documents. These may include: preliminary sketches ,small scale
schematic plans, elevations, sections, diagrams, and other graphic
and written documents, General written description of project.
The completion of the schematic design phase represents
approximately 30 percent design completion for the project
Design Development
The design development phase takes the project from about 30
percent to approximately 60 percent design.
It is the time when the design team will be evaluating and selecting
all the major systems and components of the project.
During this phase of the project the design team is involved in the
evaluation and finalization of all the architectural components and
project systems.
The project's budget and schedule continue to be monitored and
adjusted.
Contract Documents
Construction Procurement:
Contractor qualification/bidder list
 Prequalification: The reduction of the number of possible
bidders to a small group of serious, qualified bidders improves
the effectiveness of the selection process.
Solicitation
Proposal preparation
Bid/proposal opening
Bid/proposal evaluation
Award of contract
Final negotiation
Construction
Mobilization
Subcontracting
Purchasing
Permits
Site preparation
Foundations
Interior finishes and equipment
Occupancy/ Post Construction:
Start-up and testing
Leasing
Operation
Correction
Repairs/maintenance
Building evaluation
Cost Influence Curve
Level of Influence
Influence
Project
Cost
Time

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1 Introduction.pdf

  • 1. Dr. Mohammed ABUNEMEH CONSTRUCTION CONTRACTS COST ESTIMATE AND SPECIFICATIONS An Najah National University Faculty of Engineering
  • 2. Course Description The course is designed to give students, a working knowledge of construction contracts, contractual relationships within the construction industry and fundamentals of construction specification writing.
  • 3. Course Outline Introduction Elements of the total construction project cycle and processes. project delivery methods, Construction contracts types bidding process Contract documents Type of bonds Specifications Drawings General Conditions
  • 4. Course Outline Claims Dispute resolution Quantity surveying Estimating construction cost Pricing
  • 5. Grading System  Grading policy for this course will be based on the following:  Project 20%  Midterm Exam 30%  Final Exam 50%
  • 6. Text Book & References  Text Book:  Estimating Construction Cost, Robert R. Peurifoy  Edward Fisk and Wayne Reynolds, "Construction Project Administration", 9th edition  References:  Smith, Currie & Hancock (2005) Common Sense Construction Law. 3rd Edition, John Wiley and Sons, Hoboken , New Jersey  Hinze, Jimmie (2003) Construction Contracts. 3rd Edition, McGraw-Hill Book Company, New York.
  • 7. Aims and Objectives  At the completion of this course, the student will:  Describe the relationships between the parties in the construction process (the owner, contractor, and architect) as well as their roles, duties, and responsibilities.  Understanding the projects delivery systems and different contracts organizations. And understanding the different construction contracts types, documents and specifications.  Understanding the various bidding procedures and ability to prepare bid documents and contract documents, in addition to ability to understand the types of bonds.
  • 8. Aims and Objectives  At the completion of this course, the student will:  Ability to estimate various cost components in construction projects.  Understand the quantity surveying techniques and methods.
  • 9. Introduction  Definition of Terms:  Construction Management  Construction Contracting  Construction Administration  One-to-One Concept (in organization)
  • 10. Construction Management  Construction: The process by which material, equipment, machineries are assembled into a permanent facility.  Management The planning, directing, and controlling of resources (Material, Manpower, Machines, Money) to achieve the desired goal (Time, Cost, Quality)
  • 11. Construction Contracting  Contracting: The legal and business activities needed for initiating, executing, and terminating a construction contract.
  • 12. Construction Administration  Construction Administration:  Closely related to construction management.  Can be defined as the implementation of construction management principles.
  • 13. Construction Administration  Covers the following area:  Planning and Scheduling  Business and communication system  Material control  Payment procedure  Changes to the work  Inspection and acceptance
  • 14. One-to-One Concept  Previous Administration functions involve different parties (Owner, contractors, Engineers)  To minimize confusion, conflicts, claims, use: One to One concept  Each party has a single representative who communicates important project information and orders.
  • 15. Classification of Construction Projects:  By Size: Small, Medium, Large, Mega.  By Ownership: Private, Public, Military.  By Usage: Residential, Commercial, Industrial, Utility. (Usage can be expanded to subcategories).  By Scope (preferred):  Building (Residential, non residential), emphasis on aesthetics.  Engineering (Highway, Heavy, Utility) emphasis on function  Industrial: emphasis on production
  • 16. The Construction Participants  Three key players in the game:  The client (or Owner or stakeholder)  The A/E or consultant  The contractor (or Constructor or Builder)
  • 18.
  • 19. The Owner The owner, (also called the client) A client maybe an individual. A group of people. A partnership. A limited liability company. A local or central government authority
  • 20. The Owner The owner is responsible for: Funding and paying bills for the construction of project. Determining what the project will include (also called the scope of the project), when the project can begin and must end (the schedule), Receive the ultimate benefits of the finished project.
  • 21. The Owner  Owner organizations can be broken into two major categories, public and private.  A public agency exists for the ultimate benefit of the citizens, the general public. Examples of public projects:, an highway, or an Universities, schools.  A private organization can be described as any individual, partnership, corporation, or institution that builds a project for its own use or for resale.  The owner enters into separate contract with Architect and contractor.
  • 22. The Design Professional The consultant is a party of the contractual relationship has professional skills in engineering whether civil, structure, architectural, mechanical. Etc. Who acts in behalf of the client.
  • 23. The Design Professional 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 that will be used by the construction contractor to build the project. The architect typically sub-contracts portions of work to other design professionals such as structural engineers, landscape architects, electrical & mechanical engineers In almost all cases the design professional is a licensed, registered professional who is responsible for the physical integrity of the project.
  • 24. The Contractor  A contractor is an individual or an entity that enters into a contract with the owner to carry out the construction work.  If only one contractor is appointed he may be known as the main/prime contractor. The Contractor is responsible for the interpretation of the contract documents into physical facility. Transform idea to reality
  • 25. The Contractor In most cases the prime contractor divides the work among many specialty contractors called subcontractors. On a large project these subcontractors may also divide up the work into even smaller work packages In a traditional arrangement where the owner, design professional, and contractor are separate companies, the contractor is termed a prime contractor and is contractually responsible for delivering a completed project in accordance with the contract documents.
  • 26. The Subcontractors  A contractor assigned and work under the supervision of the main contractor and who has special skills, experiences and equipment to deal with specialized aspects of the work.  Nominated subcontractor  Non-nominated subcontractors
  • 27. Project Life Cycle The major phases in the project cycle that are common to most design and construction projects are: Project Planning Design Schematic Design Design Development Contract Documents Construction Procurement (Bidding Phase) Construction Occupancy
  • 28. Project Planning Phase  During this phase of the project the owner makes decision that set the tone for the project. All projects begin with an idea or a need During this stage the owner : Selects the project site, and Establishes a conceptual estimate, schedule. The most critical decision that is made during this project phase is to make a decision as to whether or not to proceed with the project (called a go/no go decision).
  • 29. Project Planning Phase Phase activities: Feasibility studies Facility programming Budgeting Project delivery system selection Scheduling Site selection/acquisition Site investigation Financing Design services procurement
  • 30. Design Phase Design process involves: Schematic Design Talk to owner, rough sketches Design Development Major Systems & component selected Contract Documents Preliminary Cost estimate Develop Preliminary working drawings Develop working drawings with Specifications
  • 31.
  • 32. Schematic Design The A/E reviews and evaluates the owner’s program and budget requirements and discusses with the owner alternative approaches to the design and construction During schematic design, the A/E prepares conceptual design documents. These may include: preliminary sketches ,small scale schematic plans, elevations, sections, diagrams, and other graphic and written documents, General written description of project. The completion of the schematic design phase represents approximately 30 percent design completion for the project
  • 33. Design Development The design development phase takes the project from about 30 percent to approximately 60 percent design. It is the time when the design team will be evaluating and selecting all the major systems and components of the project. During this phase of the project the design team is involved in the evaluation and finalization of all the architectural components and project systems. The project's budget and schedule continue to be monitored and adjusted.
  • 35. Construction Procurement: Contractor qualification/bidder list  Prequalification: The reduction of the number of possible bidders to a small group of serious, qualified bidders improves the effectiveness of the selection process. Solicitation Proposal preparation Bid/proposal opening Bid/proposal evaluation Award of contract Final negotiation
  • 37. Occupancy/ Post Construction: Start-up and testing Leasing Operation Correction Repairs/maintenance Building evaluation