CE 172 RESEARCH

Project Participants

The participants to construction project procurement are the client

(who is the initiator), the multi-disciplinary construction
consultants (who act as the client's professional advisers) and the
building contractor (who constructs the building).

Together, this group of participants takes on and manages sequence of

distinct but unrelated activities of the construction process from
beginning to the end. A construction project, to all intents and
purposes, is the production of capital goods and, like any other
capital investment, involves careful planning and decision making.

Construction projects generally are complex and composed of many

activities. It is this complexity that calls for the input proposals
of designers, contractors, suppliers and statutory authorities for
their production. Although thee procurement method adopted may vary
the relationship of the participants, there will always be a proposer
(client), designer (architect/engineer), construction team (builder),
statutory authorities (gas, electricity, fire and water) and area
local authority.

A. The Client

The client is the key to the whole construction production process

from inception to completion and at times to post-occupancy
maintenance. Without the client there would be no construction
project. Construction industry clients either identify user potential
or create the need for the facilities and raise the necessary
financial resources for their creation. They initiate the construction
process by commissioning various construction professional to build to
specific requirement.

During the design and construction phases, the client directly or

indirectly monitors progress, time, cost, and quality objectives and
sanctions any necessary major variations to the design. Finally, on
completion, it is the client who either disposes of the product at the
marketplace or takes occupation and bears the repairs and maintenance
cost of his/her investment. Therefore, the construction industry looks
to many clients for work and, generally, these may be classified as
public sector clients or clients from the private sector.

A1. Public sector client

These are public authorities whose operations are governed generally

by Acts of Parliament. They act as agents for the central government
who exercise control over their capital building programmes and
expenditure. The key public sector clients for the UK construction
industry are:

Central government department, who are responsible for their own

programme of construction on projects.

Local authorities, who are responsible for the provision of housing,

school, libraries, swimming pool, halls, sports centers and the like.

Some health authorities, which are responsible for hospital buildings.

Public corporations (e.g. British Rail and Air Transport boards), who
are responsible for the provision of buildings and other construction
products for their own use.

A2. Private sector client

These are private companies that build for leasing, renting, sale or
own occupation. The central government only exercises a limited amount
of control over their operations (e.g. planning controls for proposed
development). The private sector clients for the construction industry
are many and may be classified as follows:

Multi-national companies (e.g. Ford, Cadbury's. ICI and Esso) who

construct factories, production plants, offices and distribution
depots for their own use.
National companies (e.g. Tesco, Sainsbury's and Woolworth's) who
construct buildings for their own use in warehousing and retail.

Local property development companies, who construct offices,

factories, shops and houses speculatively for hire, lease or sale.

Private clients, who construct new buildings, or extent, refurbish or

repair the existing building for own occupation, letting, leasing or
sale.

B. Consultant office (The Design Team)

All the developing design stage it is imperative that architectural

design and details are well integrated with those of structural,
mechanical and electrical engineers. The architect as the design team
leader is responsible for design integration. And all the design team
members are playing the important role during the design stage.

B1.The Architect

Traditionally, the design function in the construction process is the

responsibility of an architect who is a professionally qualified
person whose role is to interpret the client's project requirements
into a specific design or scheme. Design is taken to include
appearance composition, proportion, structure, function and economy of
product, but in addition the architect performs the function of
obtaining planning permission for the scheme. In most times, too, the
architect supervises and organizes the entire construction process,
starting with consulting with the client and ending with
commissioning. As an established practice, the architect plays the
leading role in the construction process. He or she collects,
coordinates, controls and disseminates project information to all
project participants. As a project team leader, the architect performs
various functions in all stages of construction process, which
includes:
Ascertaining, interpreting and formulating the client's requirement
into an understandable project brief.

Designing a building to meet the client's requirement and constraints

imposed by such factors as statutory obligations, technical
feasibility, environmental standards, site conditions and cost.

Bringing together a team of construction professionals such as the

quantity surveyor, structural engineer and service engineer to give
expert guidance on specific points of the client's construction
project.

Assessing client's cost limit and timescale, and specifying the type
and grade of materials/components for use on the construction project.

Preparing production information for pricing and construction and

inviting tenders from building contractors.

Supervising the construction on sire, constantly keeping client

informed of the project's progress and issuing production instructions
as and when required.

Keeping the client informed of the status of the project's cost and
advising ion when payment should be made or withheld.

Advising on the conduct of the project generally and resolving all

contractual disputes between client and the building contractor.

Issuing the certificate of completion, the certificate of making good

defects and the final certificate for payment.
Generally, the architect acts as an agent for all purposes relating to
designing, obtaining tenders for and superintending the construction
work for whish he or she has been commissioned. To be able to perform
above function efficiently, the architect must process, among other
things, the attributes of foresight, an understanding of construction
materials, communicating and coordinating abilities, essential design
skills and an ability to design within a set budget.

B2. Engineers

B2a. The Structural Engineer

The structural engineer acts as an advisor to the architect on all

structural problems such as stability of the structure, suitability of
materials proposed, structural feasibility of the proposed design and
sizes of structural members for a construction project. Normally, the
structural design engineer submits his/her various structural
calculations to the area local authority for approval at the same time
as the architect submits his/her drawings for building regulations
approval. In addition, the structural engineer performs structural
design and supervises his or her specialist area of the construction
project during production on site.

B2b. The Services Engineers

Like the structural engineer, the services engineers (plumbing,

electrical, heating and ventilating, air conditioning, sanitation,
lifts and escalators and so on) contribute to the building design
process to ensure that thermal and visual comfort are achieved
effectively. For this reason, they analyze the client's requirement
and priorities and advise the architect on the most appropriate design
solution. They prepare diagrams of their proposals or services layout
of the proposed construction project on the separate drawings and the
architect includes these in the tender drawings sent out to
contractors for competitive bidding. Once the services engineers have
made their contributions to the design, they ensure that their
contributions have been correctly interpreted, installed and
commissioned. Where services engineers' design layout causes any
structural problems, the advice of the structural engineer is sought.
There is also a need for the architect to coordinate the route of
pipes, cables and ducts for various services on the project.
The duties and responsibilities of the structural and services
engineer include the following:

Providing specialist advice and assisting in the design of the

construction project within the scope of their respective specialist
field.

Producing calculations or other relevant data to assist in the design,

cost planning, and the assessment of suitability of
materials/components and the like.

Supervising their respective specialist fields of the project and

modifying or redesigning work whenever required.

B3. The Quantity Surveyor

The quantity surveyor is responsible for the study of the economies

and financial implications of a construction project and, hence, he or
she would be the appropriate construction professional to advise
client/architect on matters relating to the economies and cost of a
proposed construction project. Traditionally, quantity surveyors
organize themselves into small practices; however, many are now to be
found in contracting and client organizations. Those in private
practice are mostly chosen and appointed by clients on the
recommendation of an architect.

As cost is one of the deciding factors in most construction projects,

the quantity surveyor is brought in at the earliest opportunity to
advise the client or architect on the cost of various schemes
proposed. The quantity surveyor is also able to perform several
functions on construction projects, and these may be summarized as
follows:

Preparation of preliminary cost advice and approximate estimating.

Preparation of cost plan and carrying out cost studies (investment

appraisal, life cycle costing and the like).
Preparation of contract documentation for contractor selection and
construction project administration.

Evaluation of contractors' tenders received with documentations for

acceptance or rejection.

Preparation of cash flow forecasts and institution of post-contract

cost monitoring/reporting mechanisms.

Valuation of variations that arise as the works proceed and

preparation of interim valuations at regular intervals.

Preparation of periodic cost report for the architect or client.

Preparation and agreement of final account with the contractor.

Evaluation and settlement of contractor's claim for direct loss and/or

expenses.

Settlement of contractual disputes.

C. The contractor

The production aspects of construction projects are undertaken by

building contractors who are essentially commercial companies that
contract to construct development projects. Although many major
contracting establishments are able to undertake both design and
production work, their primary function is to build and to organize
their considerable resources basically as a manufacturing
organization.

Duties and responsibilities of the contractor commence upon invitation

to tender and include the following:

Carrying out a full site investigation prior to submission of tender

to ensure that the bid includes all the cost of contractual risks and
problems.

Submitting priced bills of quantities for examination and/or

correction of any errors when required by the architect.
Planning and programming the works and reprogramming thereafter
whenever unforeseen events frustrate the program.

Controlling directly employed operatives, sub-contractors, suppliers,

materials and plant for the execution of the project to programme and
cost.

Coordinating efforts of all operatives and ensuring that the completed

works comply with the contract specification and are also to the
satisfaction of the architect.

Notifying the architect of information requirements, delays to the

construction programme, discrepancy between contract documents, direct
loss and/or expense sustained and so on.

Paying the wages of directly employed operatives, sub-contractors and

suppliers in time to avoid conflicts over payment.

Supplying all the information required by the client's professional

advisers for the proper administration of the works.

Taking steps to carry out the contractor's obligations to rectify all

defects on completion of the works.

Providing post-occupancy repair and maintenance service if so required

by the client.

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STAGES IN THE CONSTRUCTION PROCESS

The Construction Process is composed of six distinct stages, which
are:

Concept

Contracts and Bid Documents

Bidding

Construction

Construction Payments

Completion

Each of these stages is discussed below in more detail.

1. Concept

All construction projects begin with planning and design, also

referred to as "architectural programming." Numerous overlapping steps
occur during this conceptual or design phase, prior to actual
construction of the project.

An architect is the primary designer of a building or project and

controls the overall design, specifications, finished materials (e.g.,
brick, paint, carpet, wall covering, etc.), and other architectural
features of the building. In addition, the architect supervises the
engineers responsible for the structural, mechanical, electrical,
lighting and plumbing design of the building. Engineers must always
conform to the design requirements of the architect. Each member of
the design team must also be licensed with the proper state licensing
authorities where the facility is located.

Planning & Architectural Programming During the initial stages of the

design process, the architect(s) and engineer(s) have a number of
client meetings in order to determine the purpose and objective of the
proposed construction. The primary activities, for which the project
is being constructed, as well as the relationships between spaces, are
reviewed. Consideration is also given to how well the completed
project relates to adjacent buildings (if any) and its surroundings.
The preliminary programming produces a list of solutions,
alternatives, feasibility studies and costs estimates. After a review
of the programming statement, schematic plans are prepared.

Schematic Plans Schematic plans are the first plans of a facility and
show the interrelationship between spaces and activities. All of the
parties (architects, engineers, and the client) review the schematic
plans and make recommendations, as necessary. Any changes are then
incorporated into the final schematic plans. Revised schematic plans
are also known as "preliminary plans," and provide a graphic view of
the project, the refined details of how the project will look, and the
relationship of all spaces.

Once the preliminary planning phase is complete, the project then

enters a stage involving the preparation of contract bid documents and
working drawings.

2. Contracts and Bid Documents

In order to solicit construction bids, the builder must provide

potential bidders with working drawings and plans for the proposed
structure, as well as project specifications, the terms of which are
spelled out in contracts.

Contract/Working Drawings/Plans All projects, whether they involve new

construction or expansion of an existing structure, require the
preparation of contract documents. The contract working drawings and
plans provide a pictorial representation of the construction work, and
specify or lay out the designer's intentions for the facility. The
drawings illustrate, among other things, the appearance, layout,
equipment, and amenities of the project. These drawings show the
architect's plan/design for the building's overall appearance, such as
finish materials, floor plans, sizes, and use of each building area.
Engineers design the building's structural, mechanical, electrical,
plumbing and communication systems.

The architect also begins to gather project data to deal with problems
or situations that are expected to arise during the construction
process, such as local zoning requirements, local infrastructure,
traffic, environmental and population impact, acoustic, energy,
lighting, and aesthetic considerations. Various consulting engineers
may also be utilized to solve specific project problems.

Numerous drawing plans are involved in a construction project,

including the following.

Architectural Plans The architectural plans indicate the layout of the

project, such as floor plans, elevations, and details of the
construction and architectural finishes. These plans are typically
numbered sequentially with the prefix "A" for "architectural." "Plan
view," the most common type of an architectural plan, is an overhead
view of the spaces on a specific floor. These plans also indicate the
length, width and various heights of the structure and floor
elevations. Plans may show notes of specific construction information
and may also contain details on a specific portion of work.

Exterior elevations show the exterior and the exterior finishes, and
are similar to photographs of the exterior. Architectural schedules on
the plans indicate the door types, windows, hardware, plumbing, and
light fixtures in each room.

In preparing the plans, the architect utilizes graphic symbols,

instead of words, to indicate various facility conditions. These
symbols indicate the various types of material, sizes, and room
finishes to be used. Symbols may be shown on the plans themselves or
in the legends of the plans. [A list of general symbols is shown in
the Appendix of Plan Reading and Material Takeoff, by Wayne J.
DelPico, published by R. S. Means Company.]

A civil engineer is responsible for the proper drainage of a site, as

well as the design of land improvements, such as paving, curb and
gutter design, retaining walls, and drainage culverts. Site plans
prepared by the civil engineer indicate the existing and proposed
grades of the land and the specific location of the facility on the
land.

Structural Plans The structural plans are prepared by structural

engineers and show the structural design of a building. These plans
incorporate foundation planning with considerations for rain, snow,
wind, earthquakes, and other natural phenomena. Structural engineers
design the facility for both "live" and "dead" loads of the building.
Live loads consist of the people, furniture, and other items that are
not part of the building, but are supported by the building. Dead load
is simply the weight of the building or structure itself.

Mechanical Plans Mechanical plans are prepared by a mechanical

engineer to show the design of the various mechanical systems in the
building. These systems must be designed to incorporate the proper air
conditioning, heating, and ventilation equipment, as well as adequate
plumbing, to meet the needs for all of the building's designated
activities.

Like the structural engineer, the mechanical engineer must design the
mechanical building systems to meet building "loads." For example,
office work produces a certain level of heat load, whereas cooking in
a commercial kitchen may produce greater heat loads. The energy use of
the air conditioning, heating, pumps, and other building equipment are
monitored by the mechanical engineer and are considered when
specifying building equipment for an efficiently designed building
system. Mechanical plans are numbered with the prefixes "P" for
"plumbing" and "H" for "heating, ventilating, and air conditioning."

Electrical Plans Electrical plans are prepared by an electrical

engineer, and show the electrical distribution system for the
efficient distribution of power in a building. The plan design
includes the distribution of electrical power from the utility company
and the distribution to power-specific equipment. Engineering design
factors for the overall electrical "load" of a building must also be
considered (e.g., proper sizing and arrangement of transformers, panel
boards, circuits, wires, conduits and power to the various machines,
equipment and activities in the building). Electrical engineers may
also handle the lighting design requirements of the building, as well
as specialty areas such as a central security monitoring system, a
computerized control system, and fire and smoke management systems.
Electrical plans are numbered with the prefix "E" for "electrical."
Contract Specifications The second part of the contracts and bid
documents stage is the preparation of project specifications, also
known as "specs." Specs instruct the contractor how to build the
project, and consist of contract documents, the technical
specifications of the materials and the quality of the materials to be
installed, and the workmanship for installation of the materials.
Given the amount of information that is required to be included, specs
have to be organized in a coherent manner. The most widely accepted
system for arranging construction specifications is called the CSI
Master Format. The CSI format, developed by the Construction
Specification Institute, requires four categories of information:
bidding requirements, contract forms, contract conditions, and
technical specifications.

Bidding requirements Bidding requirements describe the conditions of

the bid to the owner, and encompass the Invitation to Bid, the
Instructions to Bidders, the Information Available to Bidders, the Bid
Forms and Attachments, and the Bid Security Forms. The type of
contract between an owner and a contractor dictates the form of the
bidding conditions.

Contract Form Contract forms are divided into sections, including the
Agreement, the Performance and Payment Bonds, and the Certificates.

Contract Conditions The contract conditions include the General

Conditions and Supplementary Conditions.

Technical Specifications The technical specs are generally prepared

for each specific project in the CSI Master Format and these include
hundreds, perhaps thousands of individual items that will be installed
in the project.

The CSI Format consists of 16 "Divisions of the Work", which are:

Division 1 - General Requirements

Division 2 - Site Work

Division 3 - Concrete

Division 4 - Masonry

Division 5 - Metals

Division 6 - Wood & Plastics

Division 7 - Thermal & Moisture

Division 8 - Doors & Windows

Division 9 - Finishes

Division 10 - Specialties

Division 11 - Equipment

Division 12 - Furnishings

Division 13 - Special Construction

Division 14 - Conveying Systems

Division 15 - Mechanical

Division 16 - Electrical

Each CSI Division is further sub-divided into three additional parts,

called General, Products, and Execution (Installation).

The General Section explains the scope or the limits of work for a
particular CSI Division and makes a correlation between the technical
specifications and the general and supplementary conditions of the
contract. The administrative portion for any trade (e.g., shop
drawings) would be found in this section, as well.

The Product Section lists the materials to be used, by name and model
number, and explains the quality of materials and the basis for any
substitution.

The Execution Section explains the method of material installation,

techniques to be used, and workmanship quality.

AIA Document A201, General Conditions of the Contract for Construction

The American Institute of Architects (AIA) is a nationally recognized,

professional organization of architects. Over the years, the AIA has
developed a document entitled "AIA Document A201 - General Conditions
of the Contract for Construction ("Document A201"). The Document A201
is universally accepted in the construction industry and provides the
legal basis and description of the following contract items:

General Provisions

Owner
Contractor

Administration of the Contract

Subcontractors

Construction by the Owner or by separate Contractors

Changes in the Work

Time

Payments and Completion

Protection of Persons and Property

Insurance and Bonds

Uncovering and Correction of Work

Miscellaneous Provisions

Termination and Suspension of the Contract

Document A201 provides legal definitions of the elements in the

construction process and the items that will be provided by the
contractor. Document A201 also details how to prepare material
submittals, shop drawings, and interim payment requests.

3. Bidding

The third stage of the construction process is bidding. Once an owner

determines that a project is feasible and that construction financing
is available, the owner will solicit bids or proposals from general
contractors and/or specialty contractors. Owners generally use trade
publications and newspapers in order to invite contractors to bid on a
construction job. A copy of "The Notice to Contractors" will be shown
in the project's specifications, providing contractors with the
bidding procedures.

The following is the sequence of events to prepare a contract bid:

The contractor obtains a copy of the plans and specifications from the
owner in order to prepare a formal estimate of the construction cost
or bid (experienced construction personnel prepare the bids).

The contractor reviews the contract plans and specifications to

determine how to build the project and to consider all the limitations
or conditions the owner requires for the project.

The contractor solicits bids from subcontractors, estimates their

direct material and labor costs, and evaluates the ultimate profit
potential of the contract. The amount of the bid covers the estimated
costs and a profit for the construction project.

The owner evaluates all of the submitted bids and then awards the
contract.

The contract document and specs contain the project start and
completion dates, the progress billing procedures, the insurance
requirements, and other pertinent information.

The preparation of a bid is the first step in the cost control system
of a construction project. The agreed-upon bid price then becomes the
budget by which the actual expenditures are measured and drawn
against. The object of a cost control system is to provide the general
contractor and/or owner with information regarding actual project
costs versus the anticipated or budgeted costs. These cost comparisons
become essential for internal control purposes.

Standard cost manuals, such as the "R. S. Means Building Construction

Cost Data," are used by a general contractor to compute a bid. These
guides contain a compilation of cost data for each phase of
construction. There are also construction cost data guides for both
union and non-union wage rates. If the Service examiner needs to
estimate construction costs as part of the analysis of a study, it is
important to use the proper wage rates.

Subcontractors bid jobs in much the same way that a general contractor
does. A subcontractor may also solicit bids from sub-subcontractors
for specialty construction.
Working drawings and specifications provide information to allow
general contractors to estimate the project's construction costs.
Along with using their own estimators, a contractor usually has the
subcontractor's and the material supplier's information readily
available. If necessary, a general contractor can perform the
preliminary details and/or shop drawings (see discussion on Appendix
page 6.6-10) in order to estimate the proper costs to construct
various parts of a building. The general contractor gathers all the
information from his estimators and subcontractors and then adds in an
amount for overhead and profit. This final cost estimate is used in
the competitive bidding for the construction of a project.

The cost estimate of a building or project is broken down and

organized by the construction divisions shown in the specifications.
The cost estimate is further detailed by trade and by item. The
general contractor may also have a bank of information in order to
estimate labor and material costs. Otherwise, the contractor will rely
on any of several cost estimating manuals [e.g., R. S. Means Building
Construction Cost Data (highly detailed), Marshall Valuation Services,
etc.]

4. Construction (Field Work)

The fourth stage of the construction process, called fieldwork, is the

actual construction of the project. Fieldwork is broken down into
building permits, subcontractors, scheduling subcontractors, shop
drawings, project submissions, and change orders.

Building Permits Before construction can begin, the appropriate

municipality must issue a building permit. Specifications and
blueprints must be provided to the municipality's building department,
along with the application for a permit. The period of time for a
permit to be approved can be lengthy, especially in the case of new
construction. The general contractor or owner may also be required to
submit results of soil testing, environmental impact studies, and any
other necessary testing or studies. Sometimes, a public hearing is
mandated, if there is opposition to the project. In most cases, a
permit is issued within a few months. The cost of the permit and any
related studies may be the responsibility of either the owner or the
general contractor.

Construction projects must also follow the standards of the applicable

building code. A building inspector will be involved at various
construction stages in order to verify that the project is being
constructed according to municipal code.

Subcontractors Subcontractors range from a one-man operation to

nationwide, publicly traded corporations, or divisions of larger
corporations. Subcontractors are distinguished from general
contractors by their limited scope of work, which usually involves a
special skill, knowledge, or ability. Subcontractors, which include
plumbers, electricians, framers, and concrete workers, generally enter
into contracts with the general contractor and may provide the raw
materials used in their specialty areas. The general contractor, not
the owner of the property, pays the subcontractors. Materials
purchased by the subcontractors are generally delivered directly to
the job site. The subcontractors' work may either be completed in
stages, or it may be continuous.

Scheduling of Subcontractors The general contractor schedules the

subcontractor's work so that the construction runs smoothly and is
completed on schedule. The general contractor is also responsible for
scheduling the subcontractor in such a way that one subcontractor does
not hold up another. This order on subcontractor sequencing is known
as the "critical path."

An example of the sequence in scheduling subcontractors for a small

project is as follows:

Clear the land (which may include demolition of existing structures)

Excavate the land (which may include digging holes and leveling)

Pour the foundation

Frame steel and/or concrete

Rough framing

Rough electrical
Concrete flooring

Roofing

Heating and air conditioning

Ductwork for heating and air conditioning

Elevators and/or escalators

Sprinklers and other safety equipment

Install electrical fixtures

Insulate and weatherstrip

Frame windows and door sashes

Install tile and marble

Install suspended acoustical ceilings

Install toilets, sinks and other plumbing fixtures

Paint walls (inside and out)

Shop Drawings Working drawings only include enough detail to show the
general contractor the overall layout of the building. The individual
specialty trades and suppliers use working drawings to produce shop
drawings for items such as granite finishing, cabinets and
countertops, structural steel, etc. Shop drawings detail the specific
building components and are usually produced after the final design
phase but before the beginning of the construction phase. Drawings are
prepared in accordance with the instructions on Document A201. The
architect/engineer will also check each shop drawing for precise
measurements and for compliance with the intended building design.

Project Submissions Project submissions are an important part of the

construction process. Each installed building item must receive the
architect's approval to ensure that the item or product is in
conformance with technical specifications. Project submissions
illustrate each item's intended use, function, method of attachment or
installation requirements, and placed-in-service date. When the
project is started, the architect and /or engineer monitors the
contractor's progress and often approves the progress payments made to
the contractors. The architect/engineer may also make modifications to
the building plans as needed.
Change Orders Change orders are the written contract revisions that
increase or decrease the total contract price. Change order documents
contain the change order number, change order date, a description of
the change, and the amount of the change order. Contractors, based on
the terms of the contract, may also issue orders.

5. Construction Payments

The fifth stage of the construction process is the construction

payments stage. All construction contracts extend over a period of
time. The order of any business operation is to collect money as soon
as work is complete. When a contractor completes a prescribed amount
of work, the owner pays the contractor for the completed work.

Specifications for Payment The specifications for contract payments

are shown in Document A201, under the "General Conditions for
Construction Contracts." Document A201 contains AIA Forms G701 and
G702. Form G702 requires that the contractor break down the bid into
various parts of work. The project designer (architect or engineer)
critically reviews the G702 schedule of values that are prepared by
the contractor and either accepts or rejects them. The close scrutiny
of this form is due to the future release of funds that will be used
to pay for the progress (and ultimately the completion) of
construction. This form also provides the first basis for the
construction cost control on a project. The architect and/or engineer
have a legal and fiduciary responsibility for the accuracy of the cost
allocations. The architect and the owner also want an adequate and
timely distribution of funds to ensure smooth progress payments and to
ensure that there will be the necessary funds to pay for the
completion of the last portion of the project.

It is also to the contractor's benefit that items of construction be

broken into as many parts as possible. The more individual items of
work that the contractor can identify and complete, the more items of
work he/she will be entitled to bill and for which he/she will be
timely paid. Typical schedules of values in the G 702 may be 15 to 20
pages long and may contain hundreds, if not thousands, of individual
cost items.
The contractor submits the G702 to request payment on a regular basis.
The contractor completes the G702 by listing the total construction
cost for each item of work completed to date. The amount previously
paid for the work and the amount accomplished in this billing period
are subtracted from the total amount to arrive at the amount of money
remaining, minus a retainage for the completion of the work.

It is extremely important for the Service examiner to analyze the

G702. This document provides a breakdown and analysis of the
construction costs and, since it is prepared by 3rd parties, it
provides an element of objectivity.

Change Orders The architect/engineer may make modifications or change

orders to the construction plans as needed. Change orders should be
reviewed for any agreed changes to the payment schedule.

6. Completion

The final phase of the construction process is known as the completion

stage, and it readies the building for occupancy.

As Built Plans After a facility or project is completed, the architect

and contractor prepare a set of plans known as the "as built plans."
These plans represent exactly how the facility was constructed and
they also incorporate all the changes to the original construction
plan. It is very important that the Service examiner utilize the "As-
Built Plans" when reviewing a cost segregation study because these
represent the actual construction of the project.

Notice of Partial Completion In some instances, the owner may desire

to occupy a portion of the completed building. In that case, local
building officials conduct an inspection to determine if that portion
of the facility meets all building codes and is safe to be occupied.
If approval is granted, a "Certificate/Notice of Partial Occupancy" is
issued.
Notice of Substantial Completion Local building officials issue this
notice when 95 % of the construction is complete.

Notice of Completion/Certificate of Occupancy A "Notice of Completion"

is requested by the contractor/owner when the building is 100%
complete. The project must pass a final inspection by local building
officials in order for the "Notice of Completion" and the "Certificate
of Occupancy" to be issued. These documents are recorded at the office
of the local recorder and the property will be then appraised for
property tax purposes.

http://www.csp-360.com/about-us/resources/irs-cost-segregation-audit-
techniques-guide/construction-process-cost-segregation-study

5 stages of project management

The 5 Stages of Project Management – Understanding a Construction

Project’s Life Cycle

Tyler Riddell Posted on January 27, 2017 by Tyler Riddell

The 5 Stages of Project Management – Understanding a Construction

Project’s Life Cycle

Project managers serve as the backbone of successful construction

projects, dealing with a vast number of complexities on a daily basis.
Juggling various tasks and ensuring a project meets its deadlines
takes a great deal of expertise. The Project Management Institute
(PMI), defines project management as “the application of knowledge,
skills, tools and techniques to a broad range of activities to meet
the requirements of a particular project.” With so many details and
steps going into a project, it is essential that project managers
understand a construction project’s life cycle. Breaking up a project
into these five logical steps outlined by the PMI can help ensure your
project is organized and successful every time.
Subcontractor Software Demo

1. Project Conception and Initiation

The first step in a construction project’s life cycle is deciding

whether or not a project is feasible and if it can realistically be
completed. This means doing your meticulous research to determine if a
project is worth pursuing. Two ways that managers can evaluate and
determine this is through a feasibility study and/or business case
document. A feasibility study looks at the goals, costs, and timeline
of a project to determine if the project manager thinks they have
enough resources to pursue the project. A business case document
defines the reasoning for starting a new project and what the
financial benefits will be. If after further research and discussion a
project is found to pass these evaluation tests, the project will move
on to create a project charter or Project Initiation Document (PID).
On the contrary, if it is deemed unprofitable or unachievable, it will
be dropped.

Tip: Carry out a high level of risk analysis during the initiation
phase. Identifying key risks at the beginning will help prepare your
team for anything that might come up during the project.

2. Project Definition/Planning
Once a project is approved and given the thumbs-up, a plan needs to be
outlined and put into writing. Having a written plan helps ensure that
everyone on the team is on the same page and understands the steps
that need to be taken to complete the project. During this step in the
construction project’s life cycle, the cost, scope, duration, quality,
communication, risks and resources are summarized. Hitting on each of
these areas gives your team a well-rounded idea of what will go into a
project. This phase is imperative in preparing and executing a
successful project.

Tip: Give some thought to who you want on your team. Do they have the
skills required to carry out the role? If not, make sure they receive
the proper training!

3. Project Launch/Execution

The next step in a construction project’s life cycle is the actual

execution based on your comprehensive plan developed in the previous
step. This stage is where deliverables are developed to satisfy the
customer. An initial meeting is usually held to mark the beginning of
a project and to communicate responsibilities to teams. Team members
are assigned specific tasks that they are expected to complete, and
resources are allocated accordingly. Some of the specific tasks during
this phase include: assigning teams, executing project management
plans, conducting status meetings, updating project schedule, and
modifying project plans.

Tip: Consider using a cloud-based construction software so that you

can track and share every aspect of the project’s life cycle. Software
to help keep the whole team organized and on track!
4. Project Performance/Control

This stage of the project cycle is all about monitoring. Project

performance and control goes hand in hand with the previous step
because they occur simultaneously. During this phase, project managers
track a project’s progress, often having to adjust to keep a project
on track. Specific key performance (or project) indicators(KPI’s) for
cost, time and quality are selected and utilized to determine degrees
of variation from the original project goal. Some examples of specific
KPI’s include project schedule, estimate to project completion, effort
and cost tracking, and project performance. Calculating these KPI’s
keeps projects on track to prevent any project failures.

Tip: Communicate and stay flexible. Go into a project with the mindset
that things are going to change because they will! Successful project
managers know how to adapt and modify.

5. Project Close

After a project is officially completed, we move into the final stage

of the construction project’s life cycle. This last step is vitally
important because it allows team members to evaluate, document and
learn from the project. Project Close helps members determine what
issues they had so that they can make improvements in the future. A
final team meeting is usually held and led by a project manager to
officially mark the ending of the project. Valuable team members are
rewarded and recognized, contractors are terminated, and project
successes and failures are identified. Also, project managers must
create a final project budget and final budget report to close out the
project.
Tip: Prepare a list of anything left unfinished and identify who will
complete these items. Make sure to communicate this information to any
stakeholders so that they stay informed.

Project managers go through a lot to create and deliver a highly

successful end-product, but understanding and above five stages can
ensure that the process is easier and more efficient.

Sources:

Performance Magazine

Project Management.com

Project Insight.net

Villanova University | Construction Management

Copyright © 2017 eSUB Inc. All Rights Reserved.

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The 4 Phases of the Project Management Life Cycle

Posted By: Lucidchart Content Team

August

28

2017

Whether you’re working on a small project with modest business goals

or a large, multi-departmental initiative with sweeping corporate
implications, understanding the project management life cycle is
essential. Every project has essential milestones at the beginning, in
the middle, and at the end, following a path from initiation to
completion to evaluation.

Working with an understanding of the project management cycle helps

you keep your project organized and on track from ideation to
completion.

Project Management Life Cycle Overview

The project management life cycle describes high-level processes for

delivering a successful project. For every $1 billion invested in
projects by companies in the United States, $122 million was wasted
due to lacking project performance, according to Project Management
Institute Research. Wasted money and resources can be prevented with
effective project management, as 57% of unsuccessful projects fail due
to communication breakdown. In the phases of the project management
life cycle, you come up with the idea for a project, define its goals,
plan for its execution, and guide it to completion.

The 4 Phases of the Project Management Life Cycle

The project management life cycle is usually broken down into four
phases: initiation, planning, execution, and closure—these make up the
path that takes your project from the beginning to the end. Some
methodologies also include a fifth phase, controlling or monitoring.
For our purposes, this phase is covered under the execution and
closure phases. To help you visualize the project management
lifecycle, use this free customizable template. It’s easy to edit and
share with your team.

4 Phases of the Project Management Lifecycle

Project management lifecycle (Click on image to modify this template)

Try it in Lucidchart

1. Initiation

In the initiation phase of the project, you identify a business need,

problem, or opportunity and brainstorm ways that your team can meet
this need, solve this problem, or seize this opportunity. During this
step, you figure out an objective for your project, determine whether
the project is feasible, and identify the major deliverables for the
project.

Instead of waiting to have the project strategy decided for you, Moira
Alexander advocates for a mental switch from being a project "manager"
to becoming a project "leader":

"Project managers must be able to sell business leaders on the

intrinsic value they offer to the business at a strategic level when
they are at the table from the start of strategic planning instead of
after the fact decision-making. Project managers effectiveness is
drastically muted when offering a "fix-it" or "workaround" once high-
level directional business decisions are made without their
expertise."

Clearly it's worth it to do what it takes to make your voice heard

early, before the strategy is set in stone.

Project management steps for the initiation phase

Steps for the project initiation phase may include the following:
Undertaking a feasibility study – Identifying the primary problem your
project will solve and whether your project will deliver a solution to
that problem

Identifying scope – Defining the depth and breadth of the project

Identifying deliverables – Defining the product or service to provide

Identifying project stakeholders – Figuring out whom the project

affects and what their needs may be

Developing a business case – Using the above criteria to compare the

potential costs and benefits for the project to determine if it moves
forward

You’ll also develop a statement of work or project initiation

document, which may include basic project life cycle flowcharts.

2. Planning

Once the project is approved to move forward based on your business

case, statement of work, or project initiation document, you move into
the planning phase. In this phase, you break down the larger project
into smaller tasks, build your team, and prepare a schedule for the
completion of assignments. During this phase, you create smaller goals
within the larger project, making sure each is achievable within the
time frame. Smaller goals should have a high potential for success.
Here is an example workflow diagram that you can use as a template to
plan your projects.

4 Phases of the Project Management Lifecycle

Workflow diagram template (Click on image to modify this template)

Project management steps for the planning phase

Steps for the project planning phase may include the following:
Creating a project plan – Identifying the project timeline, including
the phases of the project, the tasks to be performed, and possible
constraints

Creating workflow documents or process maps – Visualizing the project

timeline by diagramming key milestones

Estimating budget and creating a financial plan – Using cost estimates

to determine how much to spend on the project to get the maximum
return on investment

Gathering resources – Building your functional team from internal and

external talent pools while making sure everyone has the necessary
tools (software, hardware, etc.) to complete their tasks

Anticipating risks and potential quality roadblocks – Identifying

issues that may cause your project to stall while planning to mitigate
those risks and maintain the project’s quality and timeline

The planning phase is also where you bring your team on board, usually
with a project kickoff meeting. It is important to have everything
outlined and explained so that team members can quickly get to work in
the next phase.

3. Execution

You’ve received business approval, developed a plan, and built your

team. Now it’s time to get to work. The execution phase turns your
plan into action. The project manager’s job in this phase of the
project management life cycle is to keep work on track, organize team
members, manage timelines, and make sure the work is done according to
the original plan.

Project management steps for the execution phase

Steps for the project execution phase may include the following:

Creating tasks and organizing workflows – Assigning granular aspects

of the projects to the appropriate team members, making sure team
members are not overworked
Briefing team members on tasks – Explaining tasks to team members,
providing necessary guidance on how they should be completed, and
organizing process-related training if necessary

Communicating with team members, clients, and upper management –

Providing updates to project stakeholders at all levels

Monitoring quality of work – Ensuring that team members are meeting

their time and quality goals for tasks

Managing budget – Monitoring spending and keeping the project on track

in terms of assets and resources

If you have a properly documented process already in place, executing

the project will be much easier.

4. Closure

Once your team has completed work on a project, you enter the closure
phase. In the closure phase, you provide final deliverables, release
project resources, and determine the success of the project. Just
because the major project work is over, that doesn’t mean the project
manager’s job is done—there are still important things to do,
including evaluating what did and did not work with the project.

Project management steps for the closure phase

Steps for the project closure phase may include the following:

Analyzing project performance – Determining whether the project's

goals were met (tasks completed, on time and on budget) and the
initial problem solved using a prepared checklist [link to checklist
template]

Analyzing team performance – Evaluating how team members performed,

including whether they met their goals along with timeliness and
quality of work

Documenting project closure – Making sure that all aspects of the

project are completed with no loose ends remaining and providing
reports to key stakeholders
Conducting post-implementation reviews – Conducting a final analysis
of the project, taking into account lessons learned for similar
projects in the future

Accounting for used and unused budget – Allocating remaining resources

for future projects

By remaining on task even though the project’s work is completed, you

will be prepared to take everything you’ve learned and implement it
for your next project.

Use Lucidchart throughout the project life cycle

Finding the right tools can make even the most difficult project
easier. With Lucidchart, the essential visual productivity platform,
you can document all parts of your process to make planning and
execution simple. For example, you can map out your process and
quickly glance to see whether you’re on track, or you can create an
organizational chart to define the responsibilities of everyone on
your team.

Sign up for free today to try out a tool that will increase your
productivity and save time for you and your organization.

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DEVELOP A REALISTIC COST PLAN

The cost plan should include all construction costs. Developing a plan
provides you with the information you need to control costs and
deliver the project within the budget.

Make decisions based on the forecast of all the alternatives.

Tell the project team to design within the cost plan at every stage of
development and build. Changes should be controlled and minimized.

Develop the cost plan in collaboration with the architect, the

contractor, and trade specialists. Bringing the team together brings
special expertise into the same room. A trade contractor may have ways
to reduce costs based on currently available materials or by
suggesting a more durable option.

Communicate clearly and often with the contractor to ensure all

information is received and understood in a timely manner. Going back
to deconstruct and reconstruct wastes time and money for both
contractor and owner.

USE CERTIFIED FABRICATORS

Certified fabricators have gone to the trouble of making certain their

manufacturing process follows AISC standards and is audited by a third
party. Only then does the steel go through the pre-fabrication
process. You can be certain the not just the incoming steel was
inspected; you know it went through a rigorously planned process
during fabrication.

As always, if it sounds too good to be true, it probably is. Don’t

simply go for the lowest priced structure, do your due diligence and
once you find a reputable vendor, stick with them. A good fabricator
will be happy to collaborate with you to provide the best product for
your needs.

USE STANDARD STEEL LENGTHS

Whenever possible, design for and use standard steel member lengths.
Standard products are typically lower priced than requiring special
measures. No matter the length, the weight of the entire bundle will
still be the same. Standard members require no additional cutting and
create no scrap.

Also, ask your vendor about the current market conditions to see if
one size is cheaper than another at the time you need the bundle. The
prefabrication company will probably know what sized the mills have
been rolling to create more supply which will be lower cost. The
vendor will also be happy to use up any remainders from other orders
and cut you a good deal.

DOUBLE-CHECK THE ORDER

Measure twice, cut once. Whether you fill out orders on a paper form
or online, take the time to go back over it to check for errors,
omissions, and duplications. Get communication going between the sales
and estimating teams. Put together a process to follow each time a
sale is made and enforce it. With a process in place, there will be
fewer errors and miscommunications.

CHECK PIECES WHEN THEY ARRIVE

There’s nothing worse than getting something half-built only to

discover you have missing or broken pieces, or the wrong pieces
altogether. Check everything upon delivery. Make sure everything is
right; if it isn’t, you can get it corrected before the project gets
too far.

Done quickly and well, you can send the broken and incorrect items
back on the truck they came on and immediately order replacements so
they will be delivered by the time you need them.

USE RIGHT EQUIPMENT

You wouldn’t dream of digging a lake with a shovel nor would you
expect to use a backhoe for a post hole. One wastes time, the other
wastes money. When you get the plans, go over them thoroughly to
determine exactly what you will need to move materials and erect the
building.

WORK SAFELY

It just makes sense that when people get hurt, there will be a drop in
production, not to mention a hit to your insurance and your
conscience. OSHA requires you to have a safe workplace but you should
want things to be as safe as possible anyway, just to save you
heartaches and headaches. Not to mention the cost savings, of course.

FIREPROOF COST EFFECTIVELY

Fireproofing doesn’t have to cost an arm and a leg. You have several
options to choose from depending on the specifications and regulations
governing the project.

Spray-applied fireproofing: it needs little surface preparation. Then

the member just needs to be clean of oil, grease, dirt, and any mill
scale.

Gypsum board: fairly inexpensive because the upgrading conventional

gypsum board to fire-resistant gypsum board is generally low.

Intumescent paints: these provide low weight-per-surface-area, high

durability, and good adhesion. It’s often used on architecturally
exposed structural steel to make it match the surrounding design.

START THE PUNCH LIST EARLY

If you wait until the very end to do a walkthrough to make sure

everything is completed correctly, you may wind up with nasty
surprises that waste time and cost money. Some companies start the
punchlist a month before completion.

In addition, make someone accountable for the punchlist and for

ensuring anything incomplete or incorrect has been taken care of
before the end of the project.

If you begin with a realistic plan, use certified fabricators, and

request standard members as much as possible, you will have come a
long way in adhering to your budget for a new building. Make sure you
have the orders correct and check items as they arrive will save both
time and money while showing due diligence. End as you began, by
carefully checking that everything is completed correctly as far
before the project due date as possible to mitigate time overruns due
to errors and omissions.

Following these tips can save money, time, and headaches for both
contractor and client.
1.VALUE JUDGMENT

Build what the customer values, not what the builder values, Shinn
says. Crown molding has high value in certain areas, such as in a
first-floor living room and other public parts of a house, Shinn says.
But when builders put crown molding in every room of every floor, it
ups their costs and re-duces the visual impact, and buyers will not
pay extra for it, Shinn says.

To get a handle on what the consumer wants, Shinn suggests holding a

Monopoly night, giving attendees $30,000 in fake money from the board
game, and offering them a wide range of home options to spend their
money on.

“I have had builders who were shocked at what the customers will pay
for and what the customers won’t pay for,” Shinn says. “Analyze your
standard specifications in what you put into the house, and make sure
that they have value.”

Competitively bidding building supplies is one step to smart buying,

but a builder will only be choosing among options, Shinn says. It is
better to know what materials should go into a house, and in what
quantities, so that a builder can negotiate from a position of
knowledge. What if a bid includes 15 extra sheets of roofing material
per house? Or similar levels of extra drywall? If a builder can go
back to the supplier and point this out and get a new bid with
accurate levels of material, they will have likely saved themselves
big money.

First, determine what the house should sell for. If a market study
determines a house should sell for $250,000, then work backward to
create a budget for how much should be spent on land, operating
expenses, and construction expenses, Shinn says. And make sure to
build profit into that equation.

“I go so far as to break that down into, how much can I afford to

spend on foundation? How much can I afford to spend on framing? How
much can I afford to spend in each one of my cost codes? So I have a
target to go after,” Shinn says. “I design, bid, and specify to those
targets.”

BUILD SMARTER

Shinn offers several tips for building more intelligently and trying
to control variances, and they all begin long before construction
does, he says. A builder’s first move should be to work with its
architects to create a common scope of work for all projects, so the
same information is on the same page each time, Shinn says. In
creating this plan, builders should also seek advice from their trade
partners, the people who will actually build the house, and make sure
all the information they need gets included in the overall plan. Even
if two houses are designed to be identical, if the plans are not, they
will turn out differently, Shinn says.

“The houses will change from one community to the next community,
because one superintendent is trying to build it one way, and another
superintendent is trying to build it another way,” he says. “I want
consistency through the organization. It helps your estimator, so he’s
not guessing at what you’re trying to build. It will help your
superintendent and your trades. And you’ll get heating ducts in the
same location, the furnace in the same location. ... It’s very hard to
have cost controls when you don’t have a consistent product.”

MODEL FOR SUCCESS

Generally, builders will sell more of what they model than what they
don’t, Shinn says. If builders are looking at their gross profits on a
per plan basis, and they should be, they could decide not to model the
lower grossing homes and model the more profitable product, increasing
revenue.
“Even starting the plan of action for a community, I can have a big
impact on the profitability of that community by the product mix I put
in,” he says, assuming the role of the builder.

But don’t just eliminate low-grossing product, Shinn says.

“Analyze it. Maybe I’ve got too much roof on it? Maybe I’ve got too
many kitchen cabinets in it?” he says. “I can figure out why this
thing isn’t producing the kind of profits it should be producing, and
then make some modifications.”

Shinn takes exception to what he feels many builders think of value-

engineering.

“Their definition of value-engineering is to make a big ugly house,”

he says.

Builders ought to use their resources more efficiently. They ought to

question the engineer, because engineers typically over-engineer
houses but could change their plans if pushed, Shinn says.

DON’T RUSH

Develop a complete start package prior to beginning construction on a

house and variances will go down, he says.

A complete start package will differ from builder to builder. A

builder should meet with his production people, ask what information
they need to start a house, and create a checklist of items. Then,
assign an employee to collect that information, create a packet, and
then sign off that the house is ready for construction before the
information is turned over to the production department.
“A lot of times the start package comes out in parts and pieces to the
superintendent, and when that occurs there are going to be more
mistakes during the construction process. There is going to be more
re-do,” Shinn says.

“It’s the mistake of rush to construction.”

2. What does 'Force Majeure' mean

Force majeure refers to a clause that is included in contracts to

remove liability for natural and unavoidable catastrophes that
interrupt the expected course of events and restrict participants from
fulfilling obligations.

Read more: Force Majeure

https://www.investopedia.com/terms/f/forcemajeure.asp#ixzz567oz2wY6

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BREAKING DOWN 'Force Majeure'

Force majeure is a French term that literally means "greater force."

It is related to the concept of an act of God, an event for which no
party can be held accountable, such as a hurricane or a tornado. Force
majeure also encompasses human actions, however, such as armed
conflict. Generally speaking, for events to constitute force majeure,
they must be unforeseeable, external to the parties of the contract,
and unavoidable (irresistible). These concepts are defined and applied
differently by different jurisdictions.

The concept of force majeure originated in French civil law and is an

accepted standard in many jurisdictions that derive their legal
systems from the Napoleonic Code. In common law systems such as the
U.S. and the U.K., force majeure clauses are acceptable, but must be
more explicit about the events that would trigger the clause.

The International Chamber of Commerce has attempted to clarify the

meaning of force majeure (although it is not included in the
organization's Incoterms) by applying a standard of
"impracticability," meaning that it would be – if not necessarily
impossible – unreasonably burdensome and expensive to carry out the
terms of the contract. The event that brings this situation about must
be external to both parties, unforeseeable and unavoidable. It can be
very difficult to prove these conditions, however, and most force
majeure defenses fail in international tribunals.

In any jurisdiction, contracts containing specific definitions what of

constitutes force majeure – ideally ones that respond to local threats
– will hold up better under scrutiny. Even in systems based on civil
law, the application of the concept can be strictly limited. For
example, say an avalanche destroys a supplier's factory in the French
Alps, causing long shipment delays and leading the client to sue for
damages. The supplier might employ a force majeure defense, arguing
that the avalanche was an unforeseeable, external and irresistible
event (the three tests applied by French law). Unless the contract
specifically named an avalanche as removing the supplier's liability,
the court may well decide that the supplier owes damages: French
courts have deemed an event "foreseeable" because a similar event had
occurred half a century before. Similarly, a war in a conflict-ridden
zone might not be "unforeseeable"; nor might capital controls in
struggling economy or a flood in a frequently-affected area.

In general, force majeure is in tension with the concept of "pacta

sunt servanda" (agreements must be kept), a key concept in civil and
international law with analogs in common law. It is not supposed to be
easy to escape contractual liability, and proving that events were
unforeseeable, for example, is difficult by design.

As time goes on, the world is becoming aware of natural threats we

were previously ignorant of, such as solar flares, asteroids and
super-volcanoes. We are also developing new human threats, such as
cyber, nuclear and biological warfare capabilities. These have raised
questions about the what is and is not "foreseeable" in a legal sense.
We are also becoming increasingly aware of human agency in events that
have generally been considered "external" or "acts of God," such as
climatic and seismic events. Ongoing litigation is exploring questions
of whether drilling and construction projects contributed the very
natural disasters that rendered them unworkable. In short, the
concepts that underpin force majeure are shifting.

Read more: Force Majeure

https://www.investopedia.com/terms/f/forcemajeure.asp#ixzz567pETMqj

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3.

In order to ensure that all your projects reach the required level of
success, here are the 5 essential elements that need to be included:

1. Strategic Planning

The first stage of any project is to understand the need for the
project and what it is trying to achieve. SMART (Specific, Measurable,
Attainable, Relevant, Timely,) objectives need to be established along
with measures of success and key milestones where progress can be
reviewed. Working as an internal project manager will require close
liaison with key internal stakeholders and departments to establish
their specific requirements and set commonly agreed objectives.

Related Article: Successful Projects Require the Right People

2. Product Development

The variety of activities that are deemed to be projects are wide-

ranging and varied, and can include new products, processes and
services. The development of any of these needs to be closely linked
to meeting defined business objectives and adding value to the
organisation. The benefits of a project should be well articulated at
the beginning so there is a clear link to the success of the project
and the impact on overall business aims.

3. Communication

It is vital to sell the benefits of any project to those who will be

affected during the project or by the project's final outcome.
Implementing a new process requires that end users understand why the
project is beneficial and potential buyers need to be convinced by the
advantages of new products and services. In essence, communicating the
message of why new or different is good will help counteract the
typical human reluctance to change.

4. Resources

It is vital to ensure that adequate resources in terms of people,

time, finances and equipment are in place. Internally, this could
involve the IT department providing the appropriate hardware/software,
Human Resources recruiting the necessary people or the Facilities
department providing offices or other relevant support. There also
needs to be allocated budgets and finance as well as appropriate
timelines for project completion.

5. People

No project manager works in isolation. There are many stakeholders

involved in a project who all have a specific role to play and who all
have a vested interest in the project's success. The key stakeholders
who drive projects and help make them a success include:

Sponsor: The project sponsor is the person who defines the business
objectives that drive the project. The sponsor can be a member of the
senior management team or someone from outside of the organisation.

Project Manager: A professional project manager creates the project

plan and ensures that it meets the budget, schedule and scope
determined by the sponsors. The project manager is also responsible
for risk assessment and management.

Project Team Members: These can include subject area experts, members
of departments, external professionals and new recruits. Anyone who
can offer a positive contribution to the project in terms of their
knowledge and capabilities makes a good team member.
Including these elements in a project will ensure that the final
outcome is a successful one.

Note: This article was originally published on April 25, 2012

roject manager is really in control.

The key disciplines are:

Planning

Scope

Requirements

Time/Schedule

Costs

Resources

Communications

Logistics

Procurement

Quality

Risk

Integration

Change control

Ethics

Governance.

Each discipline may require measuring, reporting and adjusting to

ensure the project stays on track. The degree of effort each
discipline deserves depends on the type, size and complexity of the
project.
Project planning

Planning is about how to capture, document and maintain data on each

of the disciplines. Ideally, your project management office (PMO) will
have guidelines, standards and templates to assist with this. The data
must be summarised in a regular project status report.

Read How to create a clear project plan.

For more information on project management, please see Service

development projects.

Project scope

The scope is what is in this project and what is not. Scope creep (the
clandestine addition of activities without re-evaluation of impact) is
one of the greatest killers of projects. Make sure that the project is
not undertaking any activity that is not in its charter to do so, and
list all of the deliverables.

Requirements

Create and maintain a 'requirements register' that shows all of the

identified requirements — who requested them, when, priority, how will
they be addressed or are they superseded?

Time/Schedule

The time/schedule is the work breakdown structure (WBS) that shows all
of the activities that have to be performed to meet the requirements
and create the deliverables of the project. How long will each
activity take and what are the dependencies between them? This is
where Microsoft Project comes to the fore.

Costs

Each activity has an associated cost. It may be in the resources

spent, operational costs in its undertaking and any items that must be
bought such as hardware, licences and plant. What is the budget for
the project and each activity, and how is the project tracking against
that budget?

Resources

When it comes to resources, ask yourself: Which resources are needed

to perform the required activities? What skills sets are required? How
many resources are required? When do they start and when do they
finish? Are they available on demand, a lead-time involved or only for
a certain period?

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Communications

Build a communications plan of who needs to be consulted, the

frequency of communication and their preferred method of discussion.
Even the simplest project can have many stakeholders, so it is
important to have a communications plan, a to make sure you deliver to
that communication plan. There is nothing worse for a stakeholder than
receiving too little or too much communication.

Logistics

When it comes to logistics, ask yourself: Are all the components at

the right place at the right time? How do components move from where
they are constructed to where they are needed? What is the cost and
time involved? Can it physically be done?

Procurement

The project will require elements and services that are easier to
purchase than to construct specifically as part of the project. It’s
important to think about the right time to buy, contract management,
finding the best price and ensuring you get what you paid for.
Quality

When it comes to quality, ask yourself: Will it have the capacity,

availability and strength that are required? Decisions elsewhere in
the project may impact on the quality, and hence the value, of the
product outcome.

Risk

Murphy’s Law can be applied to risk and how to manage the unexpected.
Is risk likely to happen? What will be done if it does happen and how
to prevent it from happening? Is there any contingency allowed for?
Can the project activities be scheduled to tackle the high risk
activities first (risk-driven scheduling)?

Integration

No project runs in isolation. It’s about managing the impact of other

projects that are happening in conjunction, and what to consider when
integrating with these other projects. Will it affect the critical
path?

Change control

All of the above elements of the project will change over the lifespan
of the project. Requests for change to the elements must be tracked
and their impact managed.

Ethics

When it comes to ethics, ask yourself: Does the project comply with
good corporate citizenship? Are we treating those impacted by the
project fairly? Have we engaged the unions, civil authorities,
government, environment and other interested parties?

Governance

How do we know the project is delivering on what it promised? An

independent body needs to review the progress of the project and its
relevance to the changing environment in which it sits.
I have yet to see a juggler manage 15 balls at once. This skill is
reserved for real project managers so next time you ask, “How is the
project going?” remember the full scope of that question.

Gary Percival is an IT service manager with more than 30 years'

experience in IT. He has worked in operations, application development
and support, and well as project management and service management.

4.Five Functions of Management & Leading

by Calia Roberts

The five functions of management ensure the organization runs

smoothly.

Effective management and leadership involve creative problem solving,

motivating employees and making sure the organization accomplishes
objectives and goals. There are five functions of management and
leadership: planning, organizing, staffing, coordinating and
controlling. These functions separate the management process from
other business functions such as marketing, accounting and finance.

Planning

The planning function of management controls all the planning that

allows the organization to run smoothly. Planning involves defining a
goal and determining the most effective course of action needed to
reach that goal. Typically, planning involves flexibility, as the
planner must coordinate with all levels of management and leadership
in the organization. Planning also involves knowledge of the company’s
resources and the future objectives of the business.

Organizing

The organizing function of leadership controls the overall structure

of the company. The organizational structure is the foundation of a
company; without this structure, the day-to-day operation of the
business becomes difficult and unsuccessful. Organizing involves
designating tasks and responsibilities to employees with the specific
skill sets needed to complete the tasks. Organizing also involves
developing the organizational structure and chain of command within
the company.

Staffing

The staffing function of management controls all recruitment and

personnel needs of the organization. The main purpose of staffing is
to hire the right people for the right jobs to achieve the objectives
of the organization. Staffing involves more than just recruitment;
staffing also encompasses training and development, performance
appraisals, promotions and transfers. Without the staffing function,
the business would fail because the business would not be properly
staffed to meet its goals.

Coordinating

The coordinating function of leadership controls all the organizing,

planning and staffing activities of the company and ensures all
activities function together for the good of the organization.
Coordinating typically takes place in meetings and other planning
sessions with the department heads of the company to ensure all
departments are on the same page in terms of objectives and goals.
Coordinating involves communication, supervision and direction by
management.

Controlling

The controlling function of management is useful for ensuring all

other functions of the organization are in place and are operating
successfully. Controlling involves establishing performance standards
and monitoring the output of employees to ensure each employee’s
performance meets those standards. The controlling process often leads
to the identification of situations and problems that need to be
addressed by creating new performance standards. The level of
performance affects the success of all aspects of the organization.
5.What is 'Value Engineering'

Value engineering is a systematic and organized approach to providing

the necessary functions in a project at the lowest cost. Value
engineering promotes the substitution of materials and methods with
less expensive alternatives, without sacrificing functionality. It is
focused solely on the functions of various components and materials,
rather than their physical attributes.

Also called value analysis.

BREAKING DOWN 'Value Engineering'

Value engineering is the review of new or existing products during the

design phase to reduce costs and increase functionality in order to
increase the value of the product. The value of an item is defined as
the most cost-effective way of producing an item without taking away
from its purpose. Therefore, reducing costs at the expense of quality
will simply be a cost-cutting strategy. With value engineering, cost
reduction should not affect the quality of the product being developed
or analyzed.

The concept of value engineering evolved in the 1940s at General

Electric, in the midst of World War II. Due to the war, purchase
engineer Lawrence Miles and others sought substitutes for materials
and components, since there was a chronic shortage of them. These
substitutes were often found to reduce costs and provided equal or
better performance.

Miles defined product value as the ratio of two elements:

function/cost. The function of an item is the specific work it was
designed to perform, and the cost refers to the cost of the item
during its life cycle. The ratio of function to cost implies that the
value of a product can be increased by either improving its function
or decreasing its cost. In value engineering, the cost related to
production, design, maintenance, and replacement are included in the
analysis. Say, a new tech product is being designed and is slated to
have a life cycle of only two years. The product will therefore be
designed with the least expensive materials and resources that will
serve up to the end of the product’s lifecycle, saving the
manufacturer and the end consumer money. This is an example of
improving value by reducing costs.

Another manufacturing company might decide to create added value by

maximizing the function of a product with minimal cost. In this case,
the function of every component of the item will be assessed to
develop a detailed analysis of the purpose of the product. Part of the
value analysis will require evaluating the multiple alternate ways
that the project or product can accomplish its function. The different
ways that are listed are narrowed down to a few basic and secondary
feasible options which may be implemented into the project. For
example, a dish liquid bottle which becomes slippery after some of the
liquid soap has leaked to the sides may be improved by redesigning the
shape of the bottle and the opening spout to improve grip and minimize
leakage. This could lead to increased sales without incurring
additional advertising costs.

Read more: Value Engineering | Investopedia

https://www.investopedia.com/terms/v/value-
engineering.asp#ixzz567sTiN2F

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Methodology

Value engineering is used to solve problems and identify and eliminate

unwanted costs, while improving function and quality. The aim is to
increase the value of products, satisfying the product’s performance
requirements at the lowest possible cost.

In construction, this involves considering the availability of

materials, construction methods, transportation issues, site
limitations or restrictions, planning and organisation, costs,
profits, and so on. Benefits that can be delivered include a reduction
in life cycle costs, improvement in quality, reduction of
environmental impacts, and so on.

Value engineering should start at project inception where the benefits

can be greatest, however the contractor may also have a significant
contribution to make as long as the changes required to the contract
do not affect the timescales, completion dates or incur additional
costs that outweigh the savings on offer.

Value engineering involves:

Identifying the main elements of a product, service or project.

Analysing the functions of those elements.

Developing alternative solutions for delivering those functions.

Assessing the alternative solutions.

Allocating costs to the alternative solutions.

Developing in more detail the alternatives with the highest likelihood

of success.

Value engineering is an exercise that involves most of the project

team as the project develops. It is about taking a wider view and
looking at the selection of materials, plant, equipment and processes
to see if a more cost-effective solution exists that will achieve the
same project objectives.

The “results accelerators” originally proposed by Miles still act a

useful guides to value engineering. Key to this is remembering the
relationship between cost and value – value is function divided by
cost. Concentration on the function of the project or product will
avoid mere cost cutting.

Result accelerators:
Avoid generalities.

Get all available costs.

Use information from the best source.

Blast, create and refine.

Be creative.

Identify and overcome road blocks.

Use industry experts.

Price key tolerances.

Use standard products.

Use (and pay for) expert advice.

Use specialists processes.

The project manager must take a pro-active role in both giving

direction and leadership in the value engineering process, but must
also ensure that time and effort is not wasted and does not have a
detrimental effect on the progress of the project.

The text in this article is adapted from Manuals 1, 4 and 7 of “Common

Learning Outcomes for European Managers in Construction” developed
within the scope of the LdV program, project number: 2009-1-PL1-LEO05-
05016 published in 2008. It is reproduced here in a modified form with
the kind permission of the Chartered Institute of Building.

6.Project Scheduling

The project schedule is the tool that communicates what work needs to
be performed, which resources of the organization will perform the
work and the timeframes in which that work needs to be performed. The
project schedule should reflect all of the work associated with
delivering the project on time. Without a full and complete schedule,
the project manager will be unable to communicate the complete effort,
in terms of cost and resources, necessary to deliver the project.
Online project management software allows project managers to track
project schedules, resources, budgets and project related assets in
real time. The project schedule can be viewed and updated by team
members associated with the project, keeping everyone well informed on
the overall project status.

Work Breakdown Structure (WBS)

The building blocks of a schedule start with a Work Breakdown

Structure (WBS). The WBS is a hierarchical reflection of all the work
in the project in terms of deliverables. In order to produce these
deliverables, work must be performed.

A typical approach in developing a WBS is to start at the highest

level, with the product of the project. For example, you are assigned
as the project manager of a New Product Development project. The new
product you are developing is a new toy for children age's five
through nine. The objective of this product development project is to
increase the revenue of the organization by ten percent.

Example of WBS:

Work Breakdown Structure

Above is an example of a WBS for this new toy. Each level of the WBS
is a level of detail created by decomposition. Decomposition is the
process of breaking down the work into smaller, more manageable
components. The elements at the lowest level of the WBS are called
tasks. In the example above, brochures, advertising and commercials
are all work packages or tasks.

Marketing collateral is on a summary level called a control account in

project management parlance. In Project Insight, project management
software, control accounts are called 'summary tasks.' Summary tasks
are roll ups of the tasks underneath them.
The decomposition of a schedule will continue at varying rates.
'Brochures' is a task identified at the fourth level of decomposition,
while the 'marketing plan' is also a task, but defined at the third
level of decomposition.

As a project manager, the level of decomposition will be dependent on

the extent to which you will need to manage. Project Insight supports
as many levels of hierarchy as are needed. The expectation is that
each task will have a single owner and the owner is expected to manage
and report on the work necessary to deliver the task. In Project
Insight, this is called the 'task owner.' If you cannot assign a
single owner, or you need to have additional visibility into the
progress of that task, additional decomposition is recommended.

Once all the deliverables of the project have been identified, tasks
will be performed in order to create the deliverables. In some cases,
these activities are the physical deliverables, but in other cases
they are the actions that need to be performed. A physical
deliverable, for example, might be an image (an actual file) that is
needed for the brochure. Listing out each of the tasks to be performed
will result in an activity list as demonstrated below.

Product Development Activity List

Activity List With Deliverables

The work package 'focus group' actually consists of three (3) separate
tasks—'identify focus group targets,' 'prepare focus group objectives'
and 'perform focus group.' The work package 'surveys,' on the other
hand, is not broken down into tasks. In our example, it may have been
determined that the task owner that is performing the surveys does not
need to report on any of the details of that task. As stated earlier,
decomposition will continue to the level that is necessary to
effectively manage the project.