Intro To Construction Methods

Construction Methods & Projects
Construction Management
Contractual arrangement
Construction management personnel can
represent owner or contractor
CM manages the basic resources of
construction
Basic Resources
workforce material
subcontractors information
equipment time
construction money
plant
Project Management
Optimize the three attributes of: quality, cost,
and time
Principle objective of a construction manager
is to complete each project on time and within
budget, while maintaining acceptable levels
of safety and risk
Method or System of Project Delivery

Traditional design-bid-build
Phased or Fast-track
Design-build
Design Phase Bid Construction phase
Traditional Design-Bid-Build
Design Phase Time

Savings
Construction phase
Phased or Fast-Track Construction

Contract Types
Traditional vs. alternative
Classification by method of award and
method of pricing
Model contracts have been developed
by AIA, AGC, CEC, DBIA, CMAA, and
Engineers Joint Contract Documents
Committee (EJCDC)
Contract Types
Method of Award
1. Competitive bidding
formally advertised public work
selective invitation for private work
awarding of contracts by:
Lowest responsible bid or
Best value i.e.: technical score price or
price + time(ft), and other variations
Contract Types
Method of Award
2. Negotiated contracts
Generally private work
Benefits include flexibility of pricing arrangement
Often used on projects of large size and great
complexity
Owner may value expertise and integrity of a
particular contractor and can award contract without
competition that may otherwise exclude that
contractor from the work
Method of Pricing
Fixed-price
1. Lump sum
Traditional, single fixed price
Predetermined price that includes profit,
overhead, and all other costs
Greatest risk to contractor resulting in a
higher markup (the greater the risk, the
higher required rate of return )
Most common contract form
Method of Pricing
Fixed-price
2. Unit-price contract
Prices of specified units of work are fixed or
predetermined
Actual cost to the owner will vary with actual
quantities placed
Best used when details and general character
of the work are known, but quantities are
subject to variation
Risk of unbalanced bids
Method of Pricing
Cost-plus
Contractor agrees to perform the work for a fixed
or variable fee covering profit and home office
costs (general overhead)
Field costs are reimbursable at actual cost
Used when:
nature of the work or physical conditions are
unpredictable
scope is unknown or difficult to define
Method of Pricing
Cost-plus
All cost-plus contracts depend on cooperation
among A/E, owner, and contractor
Record keeping and timely evaluation are
extremely critical
Detail record of labor hours and salaries,
material and equipment must be maintained
Good application for professional CM services
Types of Cost-plus Contracts

3. Cost plus fixed %
Fixed % based on portion or all of
reimbursable costs
Used in construction involving new
technology or extremely pressing needs
Owner assumes risk
Contractor cooperation very high
Little or no incentive for cost savings

4. Cost plus fixed fee
More incentive for cost savings
Incentive for timely completion
Risk shared by owner and contractor
5. Cost plus variable %
Also called sliding scale %
Keeps fee in line with type & volume of work
Fee becomes progressively smaller on work that is
repetitive, requires little or no re-engineering, re-
planning, or additional layout

6. Target estimate
May be based on dollar amounts, man-hours,
schedule, or combination
Cost savings or overrun shared by owner and
contractor at predetermined split
Cost underrun increases contractor profit, overrun
decreases profit
7. Guaranteed maximum price
Used with well defined scope of work
Particularly suitable for turnkey operation
Contractor or design-builder assumes all risk
Provisions to share savings can be applied
Construction Contracts
Prequalification of bidders
Evidence of satisfactory previous experience
Financial stability
Advanced or specialized prequalification may be
required as dictated by the magnitude and nature
of the work
Bid bonds are often required
Elements of a legal contract

offer
acceptance
consideration
legal in every respect
requires a meeting of the minds
offer + acceptance = binding obligation
Construction Contract Documents
Advertisement for bids Payment bond

Information for bidders Contract form or
agreement
Bid form
General conditions or
General notices provisions
Notice of award Supplemental and/or
Notice to proceed special conditions
Bid bond Plans
Performance bond Specifications
Construction Contract Documents
Characteristics of a good contract document:

1. Carefully considered
2. Expressed clearly
3. Time-tested
4. Comprehensive
5. Fair
6. Balanced
7. Applicable to the elements of a construction projects
bidders are required to:
examine all portions of the contract documents
examine the physical conditions of the site
determine legal requirements affecting the work
complete these investigations prior to bidding
contract documents should:
Include a hierarchy to determine which
documents govern in case of conflict, i.e.:
DelDOTs hierarchy
Not contain ambiguous language
Not contain exculpatory clauses
Construction Contracts -- General Conditions
Contractors warranties Inspection of materials
Defective drawings Inspection of field work
Approval of contractors Authority of the Engr.
plans and equipment Duties of the inspector
Approval of shop drawings Permits and licenses
other submittals Labor considerations
Guarantee by the Work done by the owner
Contractor
Lines and grades
Conduct of the work
Order and discipline
Defective work
Performance
Relations with other
contractors and Final inspection &
subcontractors acceptance
Construction Contracts -- General Conditions
Federal, state, and local Retainage
government regulations Bonding and insurance
Employment (EOE rules) Guarantee of equipment
Emergencies Borings
Minimum wage rate Spare parts
Domestic vs.foreign
materials and labor
Construction reports
Payrolls and bills of material
Cooperation among
contractors
Patents
Risk Allocations -- General Conditions
Force majeure Consequential damage

Indemnification Occupational safety, and
health of workers
Liens
Permits, licenses, and
Labor laws regulations
Differing site conditions Termination for default by
Delays and extension of time contractor
Liquidated damages Suspension of work
Warranties and guarantees
Specifications
Standard, supplemental, and special
provisions
two types of specifications:
method specification dictates equipment
and procedures
performance spec specifies only the
desired end result or product
should include hierarchy
Hierarchy
Governing ranking of contract components in
case of a discrepancy (DelDOT)
General Notices
Special Provisions
Plans
Supplemental Specifications
Standard Construction Details
Standard Specifications
Classification Coding System

Architectural building and site development
industry employees the CSI Format that
includes 16 divisions of work.
Public owners generally use a system of
sections or divisions developed and
employed for several decades
Codes, Standards, and Regulations

Model Codes
Basic/National Building Code (BOCA Code)
Uniform Building Code
Standard Building Code
National Electric Code (NEC) and Life Safety Code
by the NFPA under ANSI
The International Building Code 2000 (IBC) replaces
the first three codes. Several subcodes of the IBC
include Fire, Residential, Plumbing, Energy
Conservation, Mechanical, & Private Sewage

Model Codes
Model codes are adopted in whole or in part by the
local municipality, and become enforceable under the
law
Zoning Regulations
imposed by local zoning commissions
Environmental Regulations
imposed by the EPA, State DEP (DNREC), or local
agency

Standards
ASTM
Underwriters Laboratories, Inc. (UL)
AASHTO
ACI
AISC
many, many others
no enforcement by these agencies
specifications generally refer back to these
standards
Submittals required in the contract

copies of subcontracts
shop drawings and support calculations
catalog cuts
material or equipment samples
schedule(s)
certified payrolls
certificates of insurance
environmental test reports
material test reports & certifications
Shop Drawings
structural steel details & erection plan
erection procedures (safety)
PS/PC concrete items
shoring & underpinning details
jacking plans and calculations
scaffolding and falsework
concrete formwork design and details
construction sequencing diagrams
Shop Drawings
cofferdam design & details
dewatering procedure
stream diversions
pipe and ductwork fabrication details
reinforcing steel bending diagrams and bar lists
structural timber elements
ornamental iron or steel
maintenance of traffic plans (alternates)
Payments and related issues

mobilization and initial costs
retainage
progress payments and partial payments
material payments
change orders
substantial completion
punchlist
final acceptance and payment
Changes in plans and specs

clarification, correction, modifications prior to bid
are referred to as addenda
owner must maintain a system of distributing and
acknowledging receipt of addendum
plan and spec changes after award are referred
to as revisions, and generally require issuance
of a change order(s)
Change Orders
a written order issued by the owner to the
contractor for a change to the contract within
the scope of work
change orders are written for:
extra work
increasing or decreasing the contract quantities
alterations
change orders state the basis and amount of
payment and time extensions
Contracts
Liquidated damages
Incentive/Disincentive (bonus/penalty)
Acceleration
Increase crew levels, crew size
Add shifts and/or extend work hours
CPM schedule is an extremely valuable tool in
analyzing delay claims
Claims and Disputes

a claim is a request by a contractor for additional
compensation or time extension for occurrences
beyond the contractors control including:
differing or unexpected site conditions
change in scope
delays caused by the owner
owner has duty to provide adequate, accurate
data to the bidders
Claims and Disputes

Owner is liable to contractor when:
inaccurate data are given
extras develop because of improper design
design is significantly changed after the contract
is signed (constructive change)
Contractor must prove entitlement and the
associated damages
Contractor must provide timely notice of claim
upon discovering impact
Types of Claims
delay or disruption claim
extra work claim
acceleration
impossibility-of-performance claim
defective design claim (error or omission)
interference claim
superior knowledge claim
Dispute Resolution
Early settlement between parties
Alternative depute resolution (ADR)
negotiation arbitration (1 or 3 members)
mediation neutral advisors
Dispute Review Board (DRB)
3 or more odd number of board members selected
evenly by both sides
Litigation
sometimes unavoidable; usually undesirable; but
sometimes best method
Credits
Credits reimbursement from contractor to
owner for work eliminated (lump sum
contract or item)
Credit may also be given when specified
performance criteria is not met
Claims Avoidance
producing comprehensive, accurate, contract
documents
constructibility review
clear understanding of contract requirements prior to
bidding
having good administrative procedures in place
open and honest communication
timely troubleshooting
Claims Avoidance
Claims avoidance begins in the pre-
construction phase
Contract documents need to be clear,

accurate, comprehensive, and fairly
distribute risk
Ability to influence cost over time

Greatest potential to influence cost is during the
pre-construction design phase
Claims avoidance begins during pre-construction
Design phase
Intensive preparation and review of contract
documents
Careful consideration of methods and
equipment = consider overall constructibility
Design Professionals should:

Specify locally available material
Allow substitution of equal quality material
Avoid one-ofa-kind or non-standard items
where possibly
Design structures with as many redundant
elements as possible
Design should allow construction using the
prevailing methods and equipment
Design Professionals should:

Design to minimize required labor
Specify a quality of workmanship consistent with
the quality of the project
Do not require the contractor to assume
responsibility for information that should be
furnished by the design engineer/architect
Produce simple, straight-forward specs = clearly
state what is expected

Intro To Construction Methods

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Intro To Construction Methods

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Construction Methods & Projects

Construction Methods & Projects

Method or System of Project Delivery

Design Phase Time

Phased or Fast-Track Construction

Types of Cost-plus Contracts

Types of Cost-plus Contracts

Types of Cost-plus Contracts

Elements of a legal contract

Advertisement for bids Payment bond

Characteristics of a good contract document:

Force majeure Consequential damage

Classification Coding System

Codes, Standards, and Regulations

Codes, Standards, and Regulations

Codes, Standards, and Regulations

Submittals required in the contract

Payments and related issues

Changes in plans and specs

Claims and Disputes

Claims and Disputes

Contract documents need to be clear,

Ability to influence cost over time

Design Professionals should:

Design Professionals should:

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