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Group 1 presentation intro to cpm


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Group 1 presentation intro to cpm

  2. 2. PRESENTED BY: MORAL, AZIL TURLA, KAILA MARIE JOY Introduction to Construction Industry
  3. 3. Construction Project Management: o the overall planning, coordination, and control of a project from beginning to completion
  4. 4. Project Owner/ Client Designer Contractors Construction Model
  5. 5. Owner – Contractor Hierarchy
  6. 6. PROJECT MANAGER the individual charged with the overall coordination of the entire construction program for the owner
  9. 9. Common Types of Construction • Houses, apartments, condo, etc. residential • Schools, banks, hospitals, etc. commercial • railroads, airports, roads, etc. heavy civil • plants, mills, refineries, etc. industrial • sewer, waste management, etc. environmental
  10. 10. Market Demands or Perceived Needs Conceptual Planning and Feasibility Study Design and Engineering Procurement Construction Start-up for Occupancy Operation and Maintenance Disposal of Facility
  11. 11. Main Phases of Construction Preconstruction Procurement CloseoutConstruction
  12. 12. Critical issues facing construction in this new millennium
  13. 13. Environmental Protections
  14. 14. Information Technology Computer Aided Drafting Optimized systems and facilities
  15. 15. Human resources – the changing workforce
  16. 16. productivity o monitor and check the construction’s progress • Diaries • Logs • Daily Field reports Keep track using:
  17. 17. Things Impacting Productivity
  18. 18. Cheetos
  19. 19. Quality control - procedures used to determine if completed items meet the required quality. -“Do it right, and do it right the first time” -a primary objective for all the members of a project team. Quality requirement s - clear and verifiable.
  20. 20. The Deming business philosophy embraced 14 points, some that apply to the construction industry are: Strive to improve every process. Institute training on the job. Demand zero defects. Encourage education. Permit and display pride in one’s work.
  21. 21. Project delivery systems -The cost of design and construction is a key concern of all parties. -Avoidance of disputes between owners, design consultants, and contractors continues to be a prime objective of all parties -Design-build seems to address speed of delivery when including both design and construction time.
  22. 22. Project Delivery compliance w/ procurement statutes complexity of building time to build facility Budget Constraints Risk
  23. 23. The OrganizationOf the reported 880,000-plus general contractors operating in the United States according to the 2004 Census, overwhelming majority remain small businesses with modest annual volumes, operating in a limited geographic area.
  24. 24. Construction Technology o -allows you to learn about construction management and acquire skills in the engineering of construction. o -can also mean the sum total of processes for product and procedural improvement in the industry of construction.
  25. 25. Safety - number one priority -influenced in large part by decisions made during the planning and design process. Project managers and project superintendents will need to concentrate their safety program on these trades
  26. 26. The changing marketplace -Tomorrow’s managers will have to become more astute and selective. The changing role of the general contractor. The project manager’s role.
  27. 27. Keep the following guidelines in mind: Build a project team. Develop relationships with the owners Protect your team A promise made is a promise kept. Keep track of things that went well and those that didn’t.
  28. 28. Coordination is an ongoing activity. Collaborate Listen Look at each project a new learning experience Expect the unexpected
  29. 29. SAFETY
  30. 30. PRESENTED BY: ACOSTA, JAMIE CHRISTINE FABELLA, RONALIZA Start of the Construction Process
  31. 31. letter of intentis typically used to describe a letter from an employer to a contractor (or from a main contractor to a subcontractor) indicating the employer's intention to enter into a formal written contract for works described in the letter, and asking the contractor to begin those works before the formal contract is executed.
  32. 32. A letter of intent must be specific in nature Scope of work Lump sum, or “cost not to exceed” Money value of the work Payment terms Time frame letter of intent Contents:
  33. 33. …continuation Set out matters to be resolved Restriction on subcontracts or purchase orders Termination clause signed and dated by all concerned parties letter of intent Contents:
  34. 34. Defining costs in the letter of intent Scope of work, tasks, and reimbursable included in letters of intent in-house costs incurred by the general contractor for estimating, accounting, and even interim project management and superintendent salaries.
  35. 35. Defining costs in the letter of intent o Segregated costs associated with the work performed under the letter of intent are generally applied against the costs for the total project, when a formal construction contract is issued
  36. 36. Subcontractor commitments via LOI o While operating under the terms and conditions of the letter of intent, the general contractor may have to make certain commitments to subcontractors and vendors, and any purchase orders or subcontract agreement between the general contractor and owner.
  37. 37. The letter of intent termination clause o Any such termination clause should be included in all vendor purchase orders or subcontractor agreements. o It is important that the project manager notify all vendors and subcontractors promptly, both verbally and in writing, upon receipt of any termination notice issued by the owner.
  38. 38. Prevalent Types of Construction Contracts
  39. 39. PREVALENT TYPES OF THE CONSTRUCTION CONTRACTS GENERAL CATEGORIES Cost of the work plus a fee The Stipulated or Lump-Sum Contract The Cost-plus-a-fee with a GMP Contract Construction Manager Contract Design-build
  40. 40. PREVALENT TYPES OF THE CONSTRUCTION CONTRACTS Less frequently used contracts between owners and general contractors: Turnkey Contracts Build-Operate-Transfer Contracts with Government Agencies
  41. 41. Cost of the work plus fee is a contract agreement wherein the purchaser agrees to pay the cost of the work, including all trade contractor work, labor, materials, and equipment, plus an amount for contractor overhead and profit.
  42. 42. Cost of the work plus a fee used when budget is being restricted or when there is a high probability that actual cost might be reduced. preferred when there is no enough data to perform a detailed estimate of the work, or when the design is not completed.
  43. 43. Cost to be reimbursed: Wages Labor costs Taxes Subcontract costs Cost of materials and equipment incorporated in the completed project.
  44. 44. …continuation Cost of other materials and equipment, temporary facilities, and related items fully consumed in the performance of the work. Rental costs for temporary facilities, machinery, equipment, and hand tools Cost of removal of debris from the site Cost of document reproduction, faxed and telephone calls, postage, parcel post, and reasonable petty-cash disbursements.
  45. 45. …continuation: Travel expenses by the contractor while discharging duties connected with work. Cost of materials and equipment suitably stored offsite. Portion of insurance and bond premiums. Sales and use taxes. Fees – assessments for building permits and other related permits. Fees for laboratory tests.
  46. 46. …Continuation Royalties – license fees for use of a particular design, process, or product. Cost of electronic equipment and software directly related to the work, with the owner’s prior approval.
  47. 47. …Continuation Legal, mediation, and arbitration costs, including attorney’s fees Cost to repair damaged or nonconforming work if that damaged or nonconforming work was not caused by negligence or failure to fulfill a specific responsibility of the contractor
  48. 48. Salaries and other compensation of the contractor’s personnel stationed at the contractor’s principal office or offices. Expenses of the contractor’s principal office. Overhead and general expenses.
  49. 49. …Continuation The contractor’s capital expenses. Costs due to negligence of contractor, subcontractor or supplier. Any costs not specifically included in costs to be reimbursed. Costs, other than approved change orders, that would cause the GMP price to be exceeded.
  50. 50. F i v e c r i t i c a l e l e me n t s i n a c o s t -p l u s -f e e c o n t r a c t
  51. 51. The Stipulated or Lump-Sum Contract • Most frequently used in competitive bid work in either public or private sector
  52. 52. Related Problems • The problems of defining scope • Allowances and alternates in the stipulated-sum contract • Lump-sum contract pitfalls
  53. 53. Costs to be included in developing the total cost of the allowance Cost of materials and equipments Cost of unloading and handling at the site, plus installation costs Overhead and profit
  54. 54. What are alternates? Generally items that may be added to the contract scope at a predetermined cost
  55. 55. The Cost-Plus-a-Fee with GMP Contract GMP – Guaranteed Maximum Price This contract is frequently used because it allows the owner to gain the protection of the maximum cost of construction while retaining the potential for cost savings
  56. 56. Important in Cost-plus-Fee with GMP Contract The importance of the contract qualification statement Fees and Savings Cost certification provisions Awarding Subcontract agreements Change orders and value engineering Value engineering
  57. 57. Construction Manager (CM) Contracts
  58. 58. CM Contracts have gained much popularity for several reasons The CM concept allows an owner to engage a construction professional to work with their design team It essentially provides an owner with an arm’s length management team
  59. 59. Predesign Phase Design Phase Construction Phase Preconstruction Phase of Contract
  60. 60. Program Manager
  61. 61. Applies construction management to large, complex, or multiple projects May be required to assist in securing financing of the project Provide staff as the project progresses through design where they will use their experience Program Manager
  62. 62. One of the key elements of program management Defines the vision, implementation, schedule, budget, policies, and procedures for the project Becomes the master plan serving as the organization’s formal process Program Management Plan (PMP)
  63. 63. The Joint Venture Agreement
  64. 64. Two Basic Types of Joint Ventures •A 50/50 Split whereby risk is spread between the two parties •A JV where one contractor becomes the figurehead Joint Venture Agreement
  65. 65. Turnkey Contracts
  66. 66. Turnkey Contracts o Often associated with the process engineering industry in the design and construction of petrochemical and chemical plants
  67. 67. Build-Operate-Transfer (BOT)
  68. 68. Build-Operate-Transfer (BOT)
  69. 69. Contracts with Government Agencies
  70. 70. Contracts w/ Government Agencies Local, state, and federal public agencies have contract forms that sometimes borrow heavily from those of the AIA
  71. 71. The Davis-Bacon Act Requires payment of prevailing wage rates established for specific geographic areas of the country by the Department of Labor
  72. 72. The Contract Work Hours and Safety Standards Acts (CWHSSA) o Requires the contractor to pay time and a half for overtime hours
  73. 73. o Also known as Anti-Kickback Act o makes it a crime for anyone to require a labor or mechanic employed on a federal of federally assisted project to kickback any part of their wages
  74. 74. o Minimum hourly rates for skilled and unskilled labor should be established and included in the contract documents o Certifications, following the Davis- Bacon Act, must be strictly followed since falsification is a violation of federal law
  76. 76. ARTICLE 1 : GENERAL PROVISIONS SECTION 1.1.2 THE CONTRACT • A contractual relationship exists only between the owner and the architect.
  77. 77. SECTION 1.1.7 INSTRUMENTS OF SERVICE • Instruments of service is defined as plans, specifications, surveys, models, and sketches. SECTION1.1.8 INITIAL DECISION MAKER • Is defined in the contract as someone who will render an initial decision when a claim is presented
  78. 78. SECTION 1.5 OWNERSHIP AND USE OF DRAWINGS, SPECIFICATIONS AND OTHER INSTRUMENTS OF SERVICE Technological advances, such as computer aided design, have and will continue to have an impact on the architect’s services and the manner in which they are provided.
  79. 79. SECTION 1.6 TRANSMISSION OF DATA IN DIGITAL FORM They shall endeavor to establish necessary protocols governing such transmissions, unless otherwise already provide in the agreement or the contract documents.
  80. 80. ARTICLE 2: OWNER The owner is the person or entity identified as such in the agreement and is referred to throughout the contract documents as if singular in number.
  81. 81. ARTICLE 3 : CONTRACTOR This article defines the role of the general contractor. It deals with the topics ranging from shop drawings to the review of field conditions, supervision procedures, concealed conditions, allowances, and so forth;
  82. 82. ARTICLE 4 : ARCHITECT Divided into three sections: • General • Administration of the contract • Communications facilitating contract administration
  83. 83. ARTICLE 5: SUBCONTRACTORS •A subcontractor is a person or entity who has a direct contract with the contractor to perform a portion of the work of the site. •The term “subcontractor” does not include a separate contractor or subcontractors of a separate contractor.
  84. 84. ARTICLE 6: CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS OWNER’S RIGHT TO PERFORM CONSTRUCTION AND TO AWARD SEPARATE CONTRACTS On some projects, the owner may retain multiple contractors, each of whom will perform a separate scope of work.
  85. 85. ARTICLE 7: CHANGES IN THE WORK Changes in the work may be accomplished after execution of the contract, and without invalidating the contract, by change order, construction change directive or order for a minor change in the work, subject to the limitations stated in this article and elsewhere in the contract documents.
  86. 86. ARTICLE 8: TIME The contract time starts to run as of date specified in the owner- contractor agreement, whether or not the contractor begins work on that date
  87. 87. ARTICLE 9: Payment and Completion The contractor is directed to submit a schedule of values for approval by the architect prior to the submission of the first application for payment This article stipulates that payment is allowed for the onsite storage of materials and equipment, but any request for offsite storage payment must be made to the architect in writing
  88. 88. • A presentation of a procedure by the general contractor to insure that the title to the materials/equipment will pass to the owner • Evidence is presented that the cost of storage, materials and transportation to the site will be paid by the contractor • Certificate is furnished which documents that coverage will remain in effect during storage and transportation to the site Generally, the following conditions are required to be met when requesting payment for offsite stored materials or equipment:
  89. 89. • Conditions that permit the architect to withhold certification for payment on the monthly requisition: Decisions to Withhold Certification If defective work has not been repaired or replaced If the contractor fails to make payments to the subcontractor If reasonable evidence exists that the project will not be completed within the contract time If the contractor consistently fails to perform the work in accordance with the contract documents
  90. 90. • Provision whereby the subcontractor would be paid after the contractor received payment from the owner “Pay when Paid” • It marks the time when the contractor turns over the cost of operating the building’s utilities Certificate of Substantial
  91. 91. ARTICLE 10: Protection of Persons and Property This article requires the owner to advise the contractor of the absence or presence of any hazardous materials likely to be encountered on the site
  92. 92. ARTICLE 11: Insurance and Bonds In conjunction with specific limits of insurance contained in the bid documents, Article 11 provides more detail about insurance coverage
  93. 93. The contractor is required to purchase insurance to provide the following coverage:
  94. 94. ARTICLE 12: Uncovering and Correction of Work Should be read by both the project manager and the project superintendent to avoid situations where work required to be inspected by the architect or their consultants is enclosed, encased, or covered without having been inspected
  95. 95. ARTICLE 13: Miscellaneous Provisions Includes topics such as successors and assigns, which prohibit either party to the contract to assign either a portion of their contract or the entire contract to another party without consent of the other initial party to the contract
  96. 96. ARTICLE 14: Termination or Suspension of the Contract Conditions under which the owner may terminate the contract “for cause” are also included in this article. It allows the owner to suspend or terminate the contract “for convenience”, the circumstances of which are set
  97. 97. ARTICLE 15: Claims and Disputes It covers a wide range of issues relating to the initiation of claims, how the process works, and the stages through which claims travel
  98. 98. • - Whether initiated by owner or contractor, they must be in writing to the other party and the initial decision Notice of Claims • - Work must proceed, and the owner shall continue to make payments while the claim is in progress Continuing Performance • - The claim must be in writing and these two sections of the article include the procedures for doing so Claims for Additional Cost and Time
  99. 99. • - The contractor and owner waive claims against each other arising out of claim Claims for Consequential Damages • - The architect will serve as the initial decision maker unless stated otherwise in the contract Initial Decision