2. Spring 2009
Spring 2009
Department of Civil and Environmental Engineering
Department of Civil and Environmental Engineering
Massachusetts Institute of Technology
Massachusetts Institute of Technology
Fred
Fred Moavenzadeh
Moavenzadeh
Project Organization
Project Organization
Project Management
Project Management
1.040/1.401J
1.040/1.401J
3. Broad Delivery Method Space
Broad Delivery Method Space
Segmented
Organization
Integrated
Organization
Direct Financing
Indirect Financing
4. Most Common Delivery Methods
Most Common Delivery Methods
Owner
General
Contractor
Subcontractor Subcontractor Subcontractor
A/E
Traditional Design-Bid-Build
Owner
Trade
contractor
C/M
Trade
contractor
Trade
contractor
A/E
Pure or Agency Construction Management
Owner
Trade
contractor
C/M
Trade
contractor
Trade
contractor
A/E
Construction Management at Risk
Owner
Sub
contractor
Sub
contractor
Sub
contractor
Constructio
n Function
Design
Function
D/B Entity
Contractual Relationship
Communicational Relationship
Design - Build
5. A Bit of History (Western World)
„
„ Antiquity, Middle Ages: Design build
Antiquity, Middle Ages: Design build
„
„ 15
15th
th century
century
„
„ Greater Distinction between architect & trades
Greater Distinction between architect & trades
„
„ Greater attention to design
Greater attention to design
„
„ 18
18th
th century: Century of engineering
century: Century of engineering
„
„ General contractor in charge of trades, little subcontractors
General contractor in charge of trades, little subcontractors
„
„ Before 1930s: mixture of methods
Before 1930s: mixture of methods
„
„ Most design
Most design-
-build, some with alternative financing (94%)
build, some with alternative financing (94%)
„
„ Post WWII: Emergence of more specialized needs,
Post WWII: Emergence of more specialized needs,
subcontracting
subcontracting
„
„ 1960s, 1970s: More complicated structures, emergence
1960s, 1970s: More complicated structures, emergence
of CM, constructability needs
of CM, constructability needs
A Bit of History (Western World)
7. How To: Traditional
How To: Traditional
„
„ Hire a design professional in charge of the
Hire a design professional in charge of the
preparation of the design and contract
preparation of the design and contract
documents
documents
„
„ Competitive bid or negotiation with
Competitive bid or negotiation with
contractors
contractors after
after design complete
design complete
„
„ Contractor in charge of the delivery of the
Contractor in charge of the delivery of the
completed project (may decide to
completed project (may decide to
subcontract)
subcontract)
„
„ The contractor is the only one responsible of
The contractor is the only one responsible of
the execution of the work
the execution of the work
8. Traditional
Traditional Delivery
Delivery Method
Method
„
„ Sequential Construction Process
Sequential Construction Process
„
„ Collaborative Relationship between A/E
Collaborative Relationship between A/E
(Chosen on Qualification Basis) and Owner
(Chosen on Qualification Basis) and Owner
„
„ Different Participants
Different Participants’
’ Interests:
Interests:
„
„ Owner: Quality and Value Product, Delivery
Owner: Quality and Value Product, Delivery
Schedule
Schedule
„
„ Contractor: Profit, Construction Time, Site
Contractor: Profit, Construction Time, Site
Safety, Relationships, Reputation
Safety, Relationships, Reputation
„
„ A/E: Profit, Aesthetics, Relationships, Quality,
A/E: Profit, Aesthetics, Relationships, Quality,
Recognition
Recognition
„
„ Lump Bids Commonly Adopted, Resulting in
Lump Bids Commonly Adopted, Resulting in
Adversarial Relationship between the Owner
Adversarial Relationship between the Owner
and the Contractor
and the Contractor
9. General Contractor
General Contractor
Responsibilities
Responsibilities
„
„ Still responsible for a large fraction of jobs
Still responsible for a large fraction of jobs
„
„ Particularly public jobs with bidding
Particularly public jobs with bidding
„
„ For larger job, GC doesn
For larger job, GC doesn’
’t do much of work
t do much of work
„
„
„
„
Division of responsibility for problems (Different
Division of responsibility for problems (Different
teams)
teams)
Owner must mediate fights between contractor, designer
Owner must mediate fights between contractor, designer
Contractor designs temporary structures
Contractor designs temporary structures
„
„ Engineer needs to stamp (often
Engineer needs to stamp (often not designer
not designer architect)
architect)
(sometimes <10%)
(sometimes <10%)
„
„ Sometimes verge up against
Sometimes verge up against CMs
CMs
10. Subcontractors
Subcontractors
„
„ GC manages most subcontractors
GC manages most subcontractors
„
„ Overhead at each level
Overhead at each level
„
„ Handles submittals
Handles submittals
„
„ Get bids from subcontractors (bid shopping a danger; no
Get bids from subcontractors (bid shopping a danger; no
formal guarantee of award of contract)
formal guarantee of award of contract)
„
„
„
„
„
„
„
„
Can be large number of subcontractors
Can be large number of subcontractors
Responsible for failure
Responsible for failure
Shop drawings typically produced by subcontractors
Shop drawings typically produced by subcontractors
„
„ E.g. engineer consultants
E.g. engineer consultants
„
„ Signed off on by architect to say that meets design needs
Signed off on by architect to say that meets design needs
Problem: Things can fall through the cracks
Problem: Things can fall through the cracks
11. Subcontractors 2
Subcontractors 2
„
„ Motivations
Motivations
„
„ No In
No In-
-house ability
house ability
„
„ GC overstretched
GC overstretched
„
„
„
„
„
„
„
„
„
„ Required to have bonding by owner
Required to have bonding by owner
„
„ Laws and regulations (assign subs to contractor)
Laws and regulations (assign subs to contractor)
„
„ Due to specialization, more efficient, cheaper
Due to specialization, more efficient, cheaper
Sometimes GC provides equipment to subs
Sometimes GC provides equipment to subs
Tensions (e.g. how quickly, many subs on site)
Tensions (e.g. how quickly, many subs on site)
Subcontractor management very important for productivity
Subcontractor management very important for productivity
Sometime owners or GC put umbrella insurance over
Sometime owners or GC put umbrella insurance over
„
„ GC lacks familiarity with local conditions
GC lacks familiarity with local conditions
„
„ Need to get warrantees
Need to get warrantees
12. Role of Architect/Engineer
Role of Architect/Engineer
„
„ Typically negotiated contract
Typically negotiated contract
„
„ Recruited on service rather than commodity basis
Recruited on service rather than commodity basis
„
„ Financial stability, other factors critical
Financial stability, other factors critical
„
„ Sometimes have design competition
Sometimes have design competition
„
„ Don
Don’
’t want to push too low:
t want to push too low:
„
„ Poor de
Poor d sign
esign
„
„ Poor personnel
Poor personnel
„
„
„
„ Contrast
Contrast
„
„
„
„
No time for double
No time for double-
-check
check
Price of design has small impact on overall price
Price of design has small impact on overall price
Quality of design has big impact on overall price
Quality of design has big impact on overall price
13. Role of Architect/Engineer II
Role of Architect/Engineer II
„
„ If estimates off, may be required to redo design at own
If estimates off, may be required to redo design at own
expense
expense
„
„ Carry errors and omissions experience
Carry errors and omissions experience
„
„ Limited participation in construction process
Limited participation in construction process
„
„ Typically
Typically “
“observes
observes”
” constructions
constructions
„
„ Avoid official assumption of inspection guarantees
Avoid official assumption of inspection guarantees
„
„ Review shop drawings
Review shop drawings –
– with disclaimers
with disclaimers
„
„ Avoids close communication with GC
Avoids close communication with GC
„
„ Do not want to direct construction methods
Do not want to direct construction methods
„
„ May put suggestion in contract documents
May put suggestion in contract documents
14. Advantages
Advantages
„
„ Well known method (courts, companies)
Well known method (courts, companies)
„
„ Flexibility during design (vs. design
Flexibility during design (vs. design-
-build)
build)
„
„ Cost defined early (when bidding)
Cost defined early (when bidding)
„
„ Good contractual protection for the owner
Good contractual protection for the owner
„
„ Open bidding procedure very easy
Open bidding procedure very easy
„
„ Owner not too involved in the construction
Owner not too involved in the construction
process
process
„
„ Fiduciary relationship between A/E & owner
Fiduciary relationship between A/E & owner
„
„ Good if uncertainty primarily in design
Good if uncertainty primarily in design
15. Disadvantages
Disadvantages
„
„ Design not reviewed before construction
Design not reviewed before construction
„
„ Miss opportunities for major time/cost savings
Miss opportunities for major time/cost savings
„
„ May yield changes due to constructability
May yield changes due to constructability probs
probs
„
„ Sequential and linear process preventing from
Sequential and linear process preventing from
overlapping of tasks and money saving
overlapping of tasks and money saving
„
„ Few interactions among the participants
Few interactions among the participants
„
„ Too rushed to consider multiple alternatives
Too rushed to consider multiple alternatives
„
„ Construction can
Construction can’
’t start until design is
t start until design is
complete
complete
16. Disadvantages II
Disadvantages II
„
„ Innovative financing difficulty
Innovative financing difficulty
„
„
„
„ Difficult for complex projects
Difficult for complex projects
Leads to very conservative design strategies
Leads to very conservative design strategies
17. How To: Construction
How To: Construction
Management
Management
„
„ The Owner hires both a design firm and a
The Owner hires both a design firm and a
construction management firm
construction management firm before
before the
the
beginning of the construction of the project
beginning of the construction of the project
„
„ Typically CM selected based on quality
Typically CM selected based on quality
„
„ Many variations are possible in the delivery
Many variations are possible in the delivery
method depending mostly on when the
method depending mostly on when the
management team is hired and its skills
management team is hired and its skills
18. General Characteristics
General Characteristics
„
„ Started in late 1960s
Started in late 1960s
„
„ World trade center
World trade center
„
„ Madison Square Garden
Madison Square Garden
„
„ May recommend A/E
May recommend A/E
„
„ Check billings
Check billings
„
„ Specific CM firms tend to be quite sophisticated
Specific CM firms tend to be quite sophisticated
„
„ Warning: Many GCs claim
Warning: Many GCs claim CMs
CMs
„
„ “
“design CM
design CM”
”,
, “
“construction CM
construction CM”
” “
“owner CM
owner CM”
”
19. Tasks
Tasks
„
„ Preconstruction
Preconstruction
„
„ Constructability, value eng, estimation, alternatives,
Constructability, value eng, estimation, alternatives,
schedule, financing, manage designer, early
schedule, financing, manage designer, early
procurement
procurement
„
„ Field supervision
Field supervision
„
„ QA, Targets met, invoice checking, coordinate work
QA, Targets met, invoice checking, coordinate work
of contractors, M&E, change orders, payments,
of contractors, M&E, change orders, payments,
claims, inspections for design requirements,
claims, inspections for design requirements,
sometimes safety
sometimes safety
20. CM General Advantages
CM General Advantages
„
„ Involvement in design allows better
Involvement in design allows better
„
„ Knowledge of price early own
Knowledge of price early own
„
„ Eliminates risks in design before bids
Eliminates risks in design before bids
„
„ Constructability, value engineer. reasoning from start
Constructability, value engineer. reasoning from start
„
„ Working construction constraints into design plans
Working construction constraints into design plans
„
„ Allows flexibility in the Schedule (Fast tracking )
Allows flexibility in the Schedule (Fast tracking )
„
„ Can select CM based on quality
Can select CM based on quality
„
„ Really familiar with plans before price/get bids
Really familiar with plans before price/get bids
21. CM General Disadvantages
CM General Disadvantages
„
„ Don
Don’
’t know total cost when start construction
t know total cost when start construction
„
„ Potential conflicts with other parties
Potential conflicts with other parties
„
„ Designer
Designer
„
„ Subcontractors
Subcontractors
„
„ (Where applicable) GC
(Where applicable) GC
22. Pure (
Pure (“
“Agency
Agency”
”)
)
Construction Management
Construction Management
Owner
Trade
contractor
C/M
Trade
contractor
Trade
contractor
Contractual Relationship
Communicational Relationship
A/E
23. Pure Construction Management
Pure Construction Management
„
„ Great Flexibility in the Schedule and for
Great Flexibility in the Schedule and for
Changes
Changes
„
„ Market Competition for subcontracts
Market Competition for subcontracts
„
„ Fiduciary Relationship with the Contractor
Fiduciary Relationship with the Contractor
„
„ Small Financial Risks of PCM and High Risk of
Small Financial Risks of PCM and High Risk of
Loss of Reputation
Loss of Reputation
„
„ PCM Generally Paid a Fixed Fee (professional)
PCM Generally Paid a Fixed Fee (professional)
„
„ Take over work of designer, GC, owner
Take over work of designer, GC, owner
„
„ PCM as Facilitator/Mediator in Conflicts
PCM as Facilitator/Mediator in Conflicts
24. Advantages Pure CM
Advantages Pure CM
„
„ Great Flexibility for Changes
Great Flexibility for Changes
„
„ CM more objective, less partial
CM more objective, less partial
„
„ Less conflict between owner and CM
Less conflict between owner and CM
„
„ Small Financial Risks of PCM
Small Financial Risks of PCM
„
„ Have both
Have both
„
„ Cost competition (for subcontractors)
Cost competition (for subcontractors)
„
„ Often 5
Often 5-
-8% savings for dealing directly with subs
8% savings for dealing directly with subs
„
„ Fiduciary relationship with GC
Fiduciary relationship with GC
„
„ One common reference point: The CM
One common reference point: The CM
„
„ Owner can get rid of particular subcontractor
Owner can get rid of particular subcontractor
„
„ Lessens owner
Lessens owner’
’s responsibilities
s responsibilities
25. Disadvantages Pure CM
Disadvantages Pure CM
„
„ Lower incentive for CM to reduce price, time
Lower incentive for CM to reduce price, time
„
„ Owner alone takes risk on cost of project
Owner alone takes risk on cost of project
„
„ No guarantee from CM!
No guarantee from CM!
„
„ Participants must all be cooperative and well
Participants must all be cooperative and well
communicating
communicating
„
„ High Risk of Loss of Reputation
High Risk of Loss of Reputation
„
„ All parties must be committed from the
All parties must be committed from the
beginning
beginning
26. Lessens Owner
Lessens Owner’
’s Responsibility
s Responsibility
„
„ E.g.
E.g.
„
„ Project control
Project control
„
„ Job meetings
Job meetings
„
„ Management meetings
Management meetings
„
„ Reports (operational and annual)
Reports (operational and annual)
„
„ Administrative tasks
Administrative tasks
„
„ Budgets
Budgets
„
„ Drawing approval
Drawing approval
„
„ Oversight
Oversight
„
„ Quality assurance
Quality assurance
27. Central Artery / Big Dig
Central Artery / Big Dig
http://www.masspike.com/bigdig/index.html
28. Central Artery / Big Dig
Central Artery / Big Dig
„
„ Most complex highway project in American
Most complex highway project in American
history
history
„
„ The project consist in building 161 lane miles
The project consist in building 161 lane miles
of urban highway
of urban highway -
- about half underground in
about half underground in
a 7.5
a 7.5-
-mile corridor
mile corridor
„
„ Planning for the Central Artery/Tunnel
Planning for the Central Artery/Tunnel
Project began in 1982
Project began in 1982
„
„ Congress approved funding and the project's
Congress approved funding and the project's
basic scope in April 1987
basic scope in April 1987
http://www.masspike.com/bigdig/index.html
29. Central Artery / Big Dig
Central Artery / Big Dig
For the Fort point channel:
For the Fort point channel:
„
„ Notice to proceed was granted to Modern
Notice to proceed was granted to Modern
Continental on March 7 1997
Continental on March 7 1997
„
„ Expected date of completion: March 13 2002
Expected date of completion: March 13 2002
„
„ Estimated cost: 301,377,284.10 $
Estimated cost: 301,377,284.10 $
„
„ Modified estimated cost: 403,929,276$
Modified estimated cost: 403,929,276$
„
„ Modified date to completion: December 2004
Modified date to completion: December 2004
„
„ Engineers + consultants = 100
Engineers + consultants = 100
„
„ Workers on the site = 800
Workers on the site = 800
„
„ Priorities = schedule
Priorities = schedule-
- cost
cost-
- technical
technical
http://www.masspike.com/bigdig/index.html
30. Project Organization
Project Organization
9
9Project Delivery Systems (most common)
Project Delivery Systems (most common)
9
9Traditional
Traditional
„
„ Design / Build
Design / Build
„
„ Summary
Summary
9
9Pure Construction Management
Pure Construction Management
¾
¾ Construction Management at risk
Construction Management at risk
31. Construction Management at
Construction Management at
Risk
Risk
Owner
Trade
contractor
C/M
Trade
contractor
Trade
contractor
Contractual Relationship
Communicational Relationship
A/E
32. Construction Management at Risk
Construction Management at Risk
„
„ CM
CM usually
usually Guaranteeing Maximum Price:
Guaranteeing Maximum Price:
GMP to give the owner security that the
GMP to give the owner security that the
project will be built within budget
project will be built within budget
„
„ Often set at 95% of design
Often set at 95% of design
„
„ This is a big difference from pure CM
This is a big difference from pure CM
„
„ Fee typically 10
Fee typically 10-
-15%
15%
„
„ Reduced Owner Risk
Reduced Owner Risk
„
„ Risk
Risk-
-wise,
wise, ½
½ between the DBB and the PCM
between the DBB and the PCM
System (VERY similar to GC hired early)
System (VERY similar to GC hired early)
„
„ Contractual Relationships
Contractual Relationships betw
betw.
. CM&subs
CM&subs
„
„ Performance bonds typical
Performance bonds typical
33. Advantages CM at Risk
Advantages CM at Risk
„
„ Reduced Owner
Reduced Owner’
’s Risk
s Risk
„
„
„
„
Trade Contractors
Trade Contractors
CM at risk usually goes with Guaranteed
CM at risk usually goes with Guaranteed
Maximum Price (GMP)
Maximum Price (GMP)
Contractual Relationships between CM and
Contractual Relationships between CM and
34. Disadvantages CM at Risk
Disadvantages CM at Risk
„
„ The GMP is a defined price for an undefined
The GMP is a defined price for an undefined
product
product
„
„ Bad during design: Design pressure
Bad during design: Design pressure
„
„ Tension
Tension
„
„ CM hired early: more price risk
CM hired early: more price risk
„
„ CM hired late: less value during design
CM hired late: less value during design
„
„ CM is no longer impartial (may argue against
CM is no longer impartial (may argue against
changes
changes b/c
b/c of own interest)
of own interest)
„
„ Risk of adversarial relationship
Risk of adversarial relationship
„
„ The contract can be hard to enforce
The contract can be hard to enforce
35. Albert and Barrie
Albert and Barrie Zesiger
Zesiger Sports
Sports
and Fitness Center
and Fitness Center
„
„ Groundbreaking
Groundbreaking :
: October
October 2000
2000
„
„ Occupancy
Occupancy : 2002
: 2002
„
„ Designed
Designed by the architectural
by the architectural
firms
firms of Roche &
of Roche & Dinkeloo
Dinkeloo and
and
Sasaki
Sasaki Associates
Associates
„
„ Construction: Turner
Construction: Turner
Construction Co.
Construction Co.
„
„ Cost
Cost : $45 million
: $45 million
„
„ Olympic
Olympic-
-class 50
class 50-
-meter
meter pool
pool
„
„ An 11,000
An 11,000-
-square
square-
-foot fitness
foot fitness
center
center
