Solution Manual For Management of Construction Projects A Constructor's Perspective By John Schaufel

Instructor’s manual to accompany

Management Of Construction Projects: A Constructor’s Perspective Third edition

John Schaufelberger and Len Holm

Taylor & Francis Books 2 Park Square, Milton Park, Abingdon, Oxon, UK, OX14 4RN

Table of Contents Page Introduction to the instructor’s manual

1

Answers to review questions and selected exercises

4

Chapter 1

Introduction

5

Chapter 2

Construction contracts

8

Chapter 3

Cost estimating

13

Chapter 4

Planning and scheduling

15

Chapter 5

Preconstruction services

18

Chapter 6

Preconstruction planning

20

Chapter 7

Subcontracting

22

Chapter 8

Material management

25

Chapter 9

Project start-up

28

Chapter 10

Project documentation and communications

30

Chapter 11

Progress payments

32

Chapter 12

Cost and time control

34

Chapter 13

Quality management

36

Chapter 14

Safety management

38

Chapter 15

Contract change orders

41

Chapter 16

Claims and disputes

43

Chapter 17

Project close-out

46

Chapter 18

Construction project leadership

48

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Introduction to the instructor's manual 1. Origins of the book Thank you for choosing Management of Construction Projects: A Constructor’s Perspective as your teaching tool. Before we provide some suggestions regarding its use in your classroom, we thought it might be appropriate to provide some background on its development. The selection of topics for the first edition was made after interviewing construction industry leaders in Washington State. We were unable to find a suitable text that was written from a contractor’s perspective, as most existing textbooks discuss project management from an owner’s perspective. The first edition was published in 2002

by Prentice-Hall/Pearson and received world-wide popularity, even being translated into Mandarin. The second edition was published by Routledge, and incorporated a new complicated $60 million dollar engineering and research building as our case study.

Many new and current project management concepts and tools such as BIM, LEED, Commissioning, IPD, Lean, Superintendent roles, and Leadership were incorporated with that edition. Now this this third edition adds a chapter on Preconstruction Services to accompany Preconstruction Planning. Current technology tools are explored in most of the chapters and the quality of many of the figures and tables used to illustrate examples have been improved. Boxed ‘examples’, or short case studies, have been added to each chapter illustrating the topics with real-world construction experiences. This third edition will stretch the learning process for advanced students.

2. Organization of the text This book was developed based on the premise that students would have previously completed courses in construction materials and methods, construction contracts, cost estimating, safety, and scheduling before taking a course in project management. While many of these introductory topics are addressed in this book, they were intended to be a review of material covered in other courses, and therefore are not discussed in depth.

Topics are addressed in the sequence that a project manager and superintendent would experience them in managing a construction project. The focus is on the individual management processes and techniques needed to manage a project, and tools are provided to assist in the performance of these processes.

Each chapter has a similar organization. Topics are first discussed in general terms, then individual issues are discussed in detail and illustrated. In Chapter 1, we introduce the reader to a specific project, the NanoEngineering Building that was constructed on the University of Washington campus in Seattle, Washington. All the project management tools discussed in the text are illustrated with applications from the NanoEngineering project. Each chapter concludes with a set of review questions that emphasize the major points covered. These questions also are suitable for use in the development of quizzes or tests. Exercises are also provided to allow students to apply the principles learned, many of which are based on our case study, but any construction management or construction engineering program or course could customize or substitute their own quarter-long or 1

program case study where applicable. Answers to all the review questions and many of the exercises are contained in this instructor’s manual.

3. Suggested classroom use Introductory Project Management Course The book is suitable as a text for an introductory project management course. The instructor may choose to use the exercises and the NanoEngineering Building as a context for assigning student work or may choose to use a separate project. Some university faculty select a different commercial project each year, and the students develop detailed cost estimates in one course and project schedules and safety plans in others. In the project management courses student requirements are based on the project used in the estimating, scheduling, and safety courses. Web-based project management techniques could be used, and students required to use electronic formats for submitting their work. Students may be required to correct each graded assignment and create a project management manual that can be used as a reference portfolio. All the exercises from this text could be slightly modified with a different case study, such as described, and/or changing the timeframes or dollars slightly, yielding unlimited possibilities for homework or in-class examples. Case studies can be used to supplement the information contained in the text. Several case studies from “Construction Management Case Studies”, an inexpensive accompaniment book available from Amazon, are provided as boxed ‘examples’ in applicable chapters that can be used for additional classroom discussion. Potential solutions, or “Suspects” are available from the author.

Capstone Project Management Course Most undergraduate construction management programs have a senior capstone course.

Such courses often are structured for students to independently analyze a project and develop cost estimates, construction schedules, and project management plans. This book would make an excellent reference resource for such a course. One popular style of capstone course requires each student to identify an actual project with an estimated construction value of $5 to $10 million. The student develops a detailed cost estimate and construction schedule for the project. He or she also develops a subcontracting plan, organization chart for the project management team, site management plan, and other project management documentation. At the end of the quarter, each student is required to present a detailed project briefing to a panel of industry leaders. Depending on program size and the availability of applicable projects, some programs have the students work in teams of two, in which case the size of the project and the quantity of deliverables may increase.

Lectures A separate deck of Power Point slides has been created for each chapter. Every section, sub-section, figure, table, boxed example, and some questions and exercises have been reflected as different slides. There are over __ slides in total. These presentation tools are 2

intended as a good foundation for an instructor to customize, based upon his or her professional and teaching experience and the availability of additional case study examples.

4. Author feedback This manual provides answers to the review questions and selected exercises. We have carefully checked these answers, but would welcome any feedback or comments regarding them or any other aspect of the text. Please feel free to contact either of us be email (John Schaufelberger: jesbcon@u.washington.edu or Len Holm: holmcon@aol.com or the publisher, Routledge. We hope you and your students find the book an effective educational resource. We have enjoyed creating it.

John Schaufelberger and Len Holm

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Answers to review questions and select exercises

4

Chapter 1

Introduction Review questions: 1. What are five critical project attributes that the project manager must integrate?

Cost, schedule, safety, documents, and quality 2. What are the major phases of a construction project, and what occurs during each phase?

There are five major phases of a construction project: (1) planning, (2) start-up, (3) control, (4) close-out, and (5) analysis. Cost, schedule, management organization, and risk analysis take place during the planning stage. During start-up, a field office is established, the management team is mobilized to the project site, and mechanisms for project management, such as accounting, communication, and documentation, are implemented in the field. During the project control phase, the schedule and costs are tracked and adjusted to minimize risks, accommodate changes, and maximize profit.

Project close-out entails physical completion, documentation and accounting of the project. Project analysis compares the estimated to actual costs and schedules, evaluates changes, and the effectiveness of project controls that were implemented to take advantage of or minimize the effects of those changes.

3. What is the difference between the traditional and the construction management delivery methods?

In the traditional delivery method, the general contractor and designer have separate contracts with the owner. The formal chain-of-command flows through the owner, although informal communication lines may be established directly between the designer and contractor. In the construction management delivery method, design, construction, and management teams each have separate contracts with the owner.

The construction management firm selects and manages the design team and general contractor on the owner's behalf.

4. What is the difference between the construction manager-at-risk and the design-build delivery methods?

In the construction manager-at-risk delivery method, the general contractor is involved with planning, estimating, and value engineering during the design process, but does not develop the design. In the design-build delivery method, the contractor designs and builds the project, either with internal resources or through a joint venture. Both delivery methods accommodate fast track techniques, with construction possibly beginning before design is complete.

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5. What is the difference between the design-build delivery method and the integrated project delivery method?

In the D-B delivery method, the owner has only one contract with the designerbuilder, a two-party agreement. The designer-builder carries all the risk associated with cost and schedule. In the Integrated method the owner and the designer and the contractor (three parties) sign the same agreement and mutually sharing project risks.

6. How do the responsibilities of the project manager differ from those of the project superintendent?

The project manager is responsible for the global cost and schedule development, while the superintendent coordinates the overall schedule and prepares detailed schedules with subcontractors. The superintendent interfaces with the subcontractors and reports to the project manager, who interfaces with the owner and design team.

The project manager manages on a global scale, what the superintendent implements on a detailed level.

7. What are the major duties of the project or field engineer?

A project engineer prepares transmittals, submittals and field questions, maintains submittal and field question logs, maintains the contract files, reviews subcontractor invoices, etc.

8.

9. What is bid shopping and why is it considered unethical behavior?

Bid shopping occurs when a client shares one general contractor’s bid with another in attempt to lower prices. This also occurs when a general contractor shares subcontractor bids with other subcontractors. Contractors submit their bids, their best estimate for project cost, in confidence that the recipient will not share that information with others. Not only is this unethical, but in some instances, particularly with public work, it may be considered against the law.

10.

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Exercises: 2. Describe the advantages and disadvantages of the project management organization shown in Figure 1.8 as compared with the organization shown in Figure 1.7.

One disadvantage of the organization presented in Figure 1.7 is the separate chain-ofcommand for the project engineer and superintendent. Furthermore, the officer-incharge is responsible for managing the superintendent directly and has greater involvement with day-to-day activities than Figure 1.8. The organization in Figure 1.8 allows the project manager to integrate the day-to-day information collected by the superintendent with the overall project before presenting that information to the officer-in-charge. The structure presented in Figure 1.7 places more of the burden of day-to-day management on the officer-in-charge, competing for his or her commitment with other contractual and corporate responsibilities.

Plus new Ex 4??

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Chapter 2

Construction contracts Review questions: 1. Why is it essential that a project manager fully understand the requirements and procedures specified in the contract documents?

A project manager must understand the requirements and procedures in the contract, because he or she is responsible for satisfying all contract requirements and following specified procedures.

2. What types of information would you find in each of the following contract documents? a. Agreement b. General Conditions c. Special Conditions d. Technical Specifications e. Contract Drawings (a) The agreement identifies the parties involved in the contract; defines the project, cost, and penalties; and serves as the cover document in a contract. (b) General conditions provide a set of operating procedures that the owner typically uses on all projects. They describe the relationship between the owner and the contractor, the authorities of the owner’s representatives or agents, and the terms of the contract. (c) Special conditions provide site-specific or project-specific contractual requirements or define site restrictions. (d) The technical specifications provide criteria for the materials to be used in the project and standardized techniques for assembly, quality control, and workmanship. (e) The contract drawings depict how the different elements of the project fit together.

3. What is the difference between contract addenda and a contract change order?

Contract addenda are issued before the contract is awarded, and change orders are issued after the contract is awarded.

4. Why might an owner decide to include a special conditions section in a construction contract?

An owner may include special conditions in a contract to define equipment that the owner will provide or special insurance requirements. In addition, if the owner were a public entity, special conditions may stipulate prevailing wage requirements for labor.

5. Name and describe the four types of technical specifications.

The four types of technical specifications are: (1) descriptive specifications that detail the expected quality, assembly, and materials; (2) performance specifications that establish functional criteria of the assembly or material; (3) proprietary specifications that identify acceptable products by brand name; and (4) reference standards that refer to well-known 8

standards such as ASTM. 6. What type of construction materials are covered in division 03 of the technical specifications of a construction contract?

Division 03 covers concrete including reinforcement steel.

7. What type of construction materials are covered in division 09 of the technical specifications of a construction contract?

Division 09 covers finishes, such as paint, non-structural wall systems, and floor coverings.

8. What is the difference between a lump-sum and a unit-price contract?

A lump-sum contract stipulates a price for construction of a well-defined project, regardless of whether the project is completed under or over budget, while the value of unit-price contract is dependent on the constructed area or volume of a project, or of individual project elements. The total value of the contract may not be known until the work is completed.

9. Under what conditions might an owner decide to use a unit-price contract?

A unit-price contract is appropriate when the scope of work has not been well-defined, such as an environmental clean-up or an industrial project.

10. What is the difference between a lump-sum and a cost-plus construction contract?

A lump-sum contract carries greater risk for the contractor in terms of profit. The value of the contract is established at the time the contract is awarded. A cost-plus contract provides for reimbursement of direct project costs plus provision for a fee to cover overhead costs and profit. The total contract value of a cost-plus project may not be determined until the work is completed, and the project is closed out.

11. What is the difference between the bid and the negotiated methods of contract procurement?

In the bid method, a general contractor prepares a competitive bid against other contenders and risks losing a project to a poorly prepared bid by another contender. In the negotiated method, the general contractor relies on its reputation, relationship with the owner, and unique approach to a project either in competition with its peers or in a non-competitive scenario. The bid method usually results in a more adversarial atmosphere.

12. On what basis is the successful contractor selected in a bid method of contract procurement?

In the bid method, the project is awarded to the lowest responsive, responsible bidder.

13. On what basis is the successful contractor selected in a negotiated method of contract procurement?

In the negotiated method, the project is awarded based on the best proposed cost and schedule as well as reputation and resume and several other potential criteria.

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14. What does contractor prequalification mean in the context of a construction contract procurement strategy?

Contractor prequalification means that the owner is requiring potential contractors to submit documentation of their qualification for review before being allowed to submit a bid or a proposal. Only the best qualified construction firms will be allowed to compete for the project.

15. What are the four types of bonds used in construction? Why do owners require them?

The three types of contractor bonding are: (1) bid bonds, (2) performance bonds, (3) labor and material payment bonds, and (4) maintenance bonds. Owners require bid bonds as protection against the cost to switch to the second-low bidder if the low bidder pulls its bid. The performance and payment bonds provide protection in the event the contractor is unable to finish the project or pay its subcontractors or suppliers. A maintenance bond assures the owner the contractor will provide maintenance services through the warranty period.

16. What is the difference between builder's risk and general liability insurance?

Builder's risk insurance covers the project and transported or installed materials against property damage while the project is under construction. General liability insurance protects the general contractor or subcontractor against third party claims of damage or injury. The owner often provides builder's risk coverage.

17. What is the difference between named-peril and all-risk builder's risk insurance?

Named-peril is a form of builder's risk insurance that limits coverage to specified natural hazards such as wind, hail, fire, or explosion. All-risk is a form of builder's risk insurance that covers all damage regardless of the cause, unless specific causes have been excluded, such as earthquakes.

18. What contractor's risk is covered by worker's compensation insurance?

Worker's compensation protects the general contractor against medical, disability, and wrongful death claims associated with the death or injury of an employee.

19. What are five potential risks that a contractor might face on a construction project?

Potential sources of risk include bad weather conditions, unanticipated soil conditions or environmental contamination, material unavailability, tight labor market, poor project design, and subcontractor bankruptcy.

20. What are four alternative risk response strategies that a contractor might consider in developing a risk management plan?

A contractor can mitigate these risks by: (1) walking away from the job, (2) sharing risk in a joint venture, (3) hiring a subcontractor, or (4) purchasing insurance.

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Exercises: 1. What requirements might be included in the special conditions of a contract for the construction of a major addition to an operational hospital in a major metropolitan area? What impacts would these requirements have on the scheduled completion and cost of the project?

Special conditions stipulated for a hospital addition in an urban location may include noise restrictions, limitations on work hours, continual cleanup, system shutdowns, phasing, outdoor and indoor air quality standards, parking restrictions, requirements for material delivery routes that do not interfere with emergency vehicle traffic, additional general liability coverage due to the sensitive third party populations occupying the building, etc. These conditions could increase the cost and lengthen the construction schedule.

2. What information might an owner require contractors to submit for the owner’s review during the prequalification process, if the owner wants to identify the best-qualified contractors for negotiating a design-build contract for the construction of a major manufacturing plant?

For prequalification to negotiate the design-build of a major manufacturing plant, an owner may require examples of similar projects that the general contractor completed, particularly similar-sized facilities and building systems, along with budget, schedule, and cost per square foot data. An owner may request resumes of designers and project managers with pertinent experience who are available and will be dedicated to the project in the event the general contractor is awarded the job.

3. What criteria might an owner use when negotiating a lump-sum contract for the construction of a shopping complex that they desire be completed prior to the start of the Christmas shopping season?

In negotiating a lump-sum job with a critical retail deadline, an owner may stipulate substantial liquidated damages, in conjunction with bonuses for early completion, an agreement to meet a stipulated schedule, a plan to accomplish the stipulated schedule, and possibly a proposal to work to an expedited schedule.

4. Calculate a contractor’s cost for performance and labor and material payment bonds using the rate schedule shown in Figure 2.15 for each of the following projects: a. A construction project with an estimated cost of $750,000 b. A construction project with an estimated cost of $25 million What is the calculated bond fee (bond cost as a percentage of the construction cost) for each project? How does the bond fee vary as the project cost is increased? a.

$750,000 -$100,000 $650,000 -$400,000

($30/$1,000) x ($100,000) ..................................................................$3,000 ($20/$1,000) x ($400,000) ..................................................................$8,000

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$250,000 -$250,000

($15/$1,000) x ($250,000) ..................................................................$3,750

Total .............................................................................................................$14,750 b. $25,000,000 -$100,000 $24,900,000 -$400,000 $24,500,000 -$1,000,000 $23,500,000 -$2,000,000 $21,500,000 -$2,000,000 $19,500,000 -$2,000,000 $17,500,000 -$17,500,000

($30/$1,000) x ($100,000) ..................................................................$3,000 ($20/$1,000) x ($400,000) ..................................................................$8,000 ($15/$1,000) x ($1,000,000) .............................................................$15,000 ($10/$1,000) x ($2,000,000) .............................................................$20,000 ($7/$1,000) x ($2,000,000) ...............................................................$14,000 ($6/$1,000) x ($2,000,000) ...............................................................$12,000 ($5/$1,000) x ($17,500,000) .............................................................$87,500

Total ............................................................................................................$159,500 a. 2% and b. 0.6% The larger the project, the less the total bond percentage rate 5. What risks does a contractor face when bidding on a construction project located in a city in which she has never had a previous project?

Working in an unfamiliar geographic area, a contractor faces the risk of unfamiliarity with local codes, inspectors, permit review requirements and timelines, availability, skill level and work ethic of the local labor force, unanticipated climate or soil conditions that may adversely affect the project schedule and budget. An out-of-town contractor may not have an established reputation with local vendors and subcontractors, affecting price and availability.

6. What criteria should a contractor use in deciding which projects to submit bids on?

A contractor should consider project complexity, owner's and designer's reputations, the terms of the contract and whether those are negotiable, the type of competition, and the marketing benefit of participating in the bid process.

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Chapter 3

Cost estimating Review questions: 1. What is the difference between a conceptual cost estimate and a detailed cost estimate?

A conceptual cost estimate differs from a detailed cost estimate due to the completeness of the design documents upon which the estimate was based and the resulting margin of accuracy. A detailed estimate based upon 90 to 100% complete design drawings should be accurate to within 2% to 5% while a conceptual cost estimate is typically only accurate to within 10 to 20% of the actual cost.

2. How does an estimator develop the WBS for a project?

An estimator develops the work breakdown structure for a project by reviewing the design documents and listing the major building elements and systems required for the project. The major elements are outlined in the specifications and related two- or threedimensionally in the drawings.

3. When is a construction schedule developed in the estimating process and why?

A complete construction schedule is not usually a requirement for the estimating process, although a rough schedule is necessary after labor cost is estimated for calculating job site general conditions, which are time-dependent.

4. What is the difference between jobsite general conditions and home office indirect costs?

Jobsite general conditions apply to resources and special costs that are partially or wholly dedicated to completion of an individual project. Home office indirect costs cover annual accounting, marketing costs and profit for the firm.

5. What are two sources for labor productivity rates?

Two sources for labor productivity rates are in-house historical records and published databases, such as RS Means and The Guide.

6. Why is it important that the first conceptual estimate developed by a contractor be somewhat accurate?

The first conceptual estimate developed by a contractor must be somewhat accurate, as it is used by project owners to secure financing and by contractors to decide whether a project is worth the effort of preparing a bid.

7. What is wrong with using unit prices from published references for material and subcontract items of work?

Material and subcontract unit prices obtained from published databases do not address product availability, economies of scale, equipment use, inflation or local market conditions.

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8. What is the 80 – 20 rule and how does it apply to estimating concrete formwork?

The 80-20 rule states that 80% of the cost is contained in 20% of the work activities performed. When estimating concrete formwork, it is more important to calculate the rough dimensions of the footings than to itemize each structural variation. The labor costs of squaring, leveling and assembly will form the largest portion of the estimate, regardless of whether 10-inch or 12-inch forms are used. A simple factor may be applied to the first-order estimate to correct the rough estimate for overall complexity of design and covers minor items such as nails, snap ties, or form oil.

9. If an estimator is certain of receiving at least one or two subcontract bids on bid day, why should he or she bother with estimating that area of work themselves?

A contractor should prepare an estimate for all subcontract scopes so that the accuracy of subcontract bids may be evaluated, especially if there is only one bid or a significant disparity in two subcontract bids. This process may identify subcontract bids that should be eliminated from consideration.

10. What is an acceptable jobsite general conditions percentage range? Should straight percentage calculations be used in developing an estimate?

An acceptable job site general conditions percentage is 5 to 10%. Straight percentage calculations should not be used in developing a detailed estimate, as the percentage varies primarily according to the size, complexity, duration, and location of each project but is an acceptable approach for conceptual budgets.

Exercises: 4. In addition to the data shown in Figure 3.9 summary estimate what other detail would a construction-savvy client look for from a contractor on a completely openbook project? If you were the client, list your top ten items.

Direct craft hours and wage rates, Labor burden rates for direct craft and salaried personnel, Material quantities, Material unit prices, Equipment rental rates, Outside versus internal equipment ownership, All different concrete systems separated, Exact quotes for each subcontractor and supplier, No collapsed or summarized systems or CSI divisions, Substantiation for percentage markups such as liability insurance, Proposal for accounting of any stated contingencies, Proposed savings splits, and others.

5. A) How did the estimator in Example 3 included with this chapter error? B) Could the estimator be held liable to his client for the budget short-fall?

A) The estimator should have visited the jobsite and met with local contractors and suppliers and completed his research before submitting the budget to his client.

B) Most professional services contracts limit a consultant’s liability. The consultant provides a budget as a recommendation and advice, but not a ‘bid’ so likely no, he would not be held liable.

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Chapter 4

Planning and scheduling Review questions: 1. What is the difference between scheduling and planning?

Planning precedes scheduling by identifying the basic means, methods, activities, and relationships that actually need to be scheduled. Scheduling applies timelines to the ‘plan’ and establishes the critical path.

2. Which members of the construction team input to the project plan?

In addition to the general contractor's staff scheduler and project manager, the superintendent, subcontractors, and suppliers should provide input into the project plan.

3. What is the difference between a bar chart schedule and a network diagram schedule?

A bar chart is time-scaled and may or may not show activity dependencies. A network diagram does show relationships between activities.

4. Who should develop a three-week schedule, and why them?

Three-week, or short-interval, schedules should be prepared by each foreman or superintendent and subcontractor to identify resource requirements as well as potential logistical conflicts. They are the people who are responsible for making it happen in the field.

5. What is the difference between updating the schedule and using it to monitor progress?

Updating the schedule involves changing the schedule to reflect actual conditions and refine predictions for scheduling and completion of unfinished activities. Monitoring the schedule consists of comparing the actual status of each activity, including start and completion dates, to the original schedule, which is maintained as a baseline.

6. Who indicates progress on the schedule? When should it be done?

Progress on a schedule should be monitored weekly by the superintendent, who receives input from foremen and subcontractors. Progress is usually reported by the superintendent in the weekly OAC meeting.

7. Are schedules contract documents?

Schedules are not necessarily contract documents, but may be required elements of the prime contract and should be required in subcontractor and supplier contracts. A summary schedule may be incorporated into the contract as an exhibit listed in the contract agreement.

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8. Why do project managers resist developing cash flow curves?

Project managers resist developing cash flow curves, because the curves assume idealized invoicing and payment schedules that are impossible to reproduce exactly.

The curves do not account for compounded delays in invoicing and payment dates that may be difficult to itemize and justify to a lender.

9. Should a cash flow curve always be a perfect bell-shaped curve?

A cash flow curve is not required to exhibit a perfect bell shape. The idealized shape is distorted by surges in expenditures, such as mobilization, steel delivery, and interior finishes that take place during the beginning, middle, and end of a project. Each project is unique.

10. When does day one of a contract schedule occur?

Day one of the contract schedule may be identified as a date specified in the contract agreement, but contractors often include four stipulations in the contract for day one, including: • Verification of Owner Financing • Receipt of Building Permits, • Receipt of a Signed Contract, and • Receipt of a Notice to Proceed.

11. How does the 80-20 rule apply to developing schedules?

With respect to developing schedules, the scheduler should focus on identifying the 20% of the critical activities that comprise 80% of the length and/or complexity of the project. The other 80% of activities may be applied along that critical path.

12. When is it appropriate to revise the schedule?

It is appropriate to revise the schedule if it is a contract requirement, if the scope has changed substantially, and whenever progress varies substantially from the original scope or schedule. The parties affected should have the opportunity to review the revised schedule before it is incorporated into the contract.

13. How is an as-built schedule developed, and when should it be developed?

Ideally, an as-built schedule is developed on a day-to-day basis, evaluating progress and incremental impacts to progress while keeping an eye on the project completion date. Actual material delivery dates, start dates, durations, completion dates, and previously overlooked restraining factors should be noted. The as-built schedule should be developed as the project progresses. Relying on project documentation to create an as-built schedule after the fact may skew the data, and overlook contributing conditions that were not recorded in daily logs.

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Exercises: 5. Regarding Example 4 from this chapter: A) Why did the structural engineer of record not incorporate construction access to the high bay space in the design documents?

B) Other than the solution this superintendent provided, what other creative methods would you propose?

A) Construction means and methods is left up to the contractor. The engineer would not want to be considered liable if its proposal was not feasible and the project owner was subjected to a change order.

B) Other options would have included: Scaffolding the bottom chord of the trusses and working off of that with scaffold and scissor lifts. Likely a safety net would have been necessary. Another solution would be working off of high lift booms and cranes with baskets, which would not have been productive.

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Chapter 5

Preconstruction services Review questions: 1. What are five services that a project owner may require of the general contractor in a preconstruction services contract?

Consultation, preliminary cost estimating, preliminary project scheduling, constructability analysis, value engineering, site logistics planning, identification of long lead materials, QC planning, Safety planning, Storm Water Control Planning, LEED or Sustainability Planning, etc.

2. What is the difference between constructability analysis and value engineering?

Constructability analysis is reviewing the proposed design for its impact on the cost and ease of construction, while value engineering seeks to find the most economical building components from a life-cycle cost perspective.

3. What is meant by the term life-cycle cost when conducting value engineering studies?

Life-cycle cost is the sum of all acquisition, operation, maintenance, use, and disposal costs for a product over its useful life 4. How are building information models used for preconstruction planning?

BIM models are used to determine constructability conflicts, develop site plans, and improve opportunities for construction safety, scheduling, and prefabrication of materials 5. How are building information models used for constructability analysis?

BIM files for all of the design disciplines are combined and compared to identify potential construction conflicts.

6. How are 4D building information models used for preconstruction planning?

Time is added to the 3D BIM model to simulate construction sequencing and scheduling. Not discussed in the text but some contractors are adding a fifth dimension – cost – to the model as well.

7. What is the LEED building assessment system?

LEED is one of several systems of measurement of the impact of a construction project on the environment.

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8. Why do some project owners pursue LEED certification?

Not necessarily discussed in the text, but building owners pursue sustainability efforts for a variety of reasons, including: • Compliance with building codes • Culture of the building owner and the designer • Employee satisfaction • Marketability to tenants and potential buyers • It is the ‘right’ thing to do.

Exercises: 1. You have been asked to conduct a value engineering study to determine the most costeffective type of window system for a hospital project. What functions would you consider essential in your analysis, and what cost data would you consider in conducting the study?

• Purchase cost comparison of various window systems; • Installation cost comparison of various window systems; • Energy efficiency, Maintainability, and Warrantee; • Interface with other building systems such as structure, siding; • Waterproofing, and interior finishes, and others.

2. You are a project manager on a project seeking LEED gold certification. What measures would you take to minimize construction waste on the project?

Recycle wherever possible, Just-in-Time deliveries, Subcontractor buy-in, Do not overorder construction materials, Re-use materials such as concrete formwork.

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Chapter 6

Preconstruction planning Review questions: 1. What are five services that a project owner may require the general contractor in a preconstruction services contract?

Consultation, preliminary cost estimating, preliminary project scheduling, constructability analysis, value engineering, site logistics planning, identification of long lead materials, QC planning, Safety planning, Storm Water Control Planning, LEED or Sustainability Planning, etc.

2. What is a risk register, and how is it used?

A risk register is a tool for the project team to identify and manage strategies associated with potential project risks 3. Why was the concept of partnering developed?

The concept of partnering was developed as a mechanism to foster team cooperation, develop and recognize mutual goals, and provide a framework for goal-oriented conflict resolution. Partnering is intended to mitigate adversarial conflicts that impact a project when team members may unfortunately prioritize immediate or personal or corporate goals above successful project completion.

4. What is a partnering charter, and how is it developed?

A partnering charter consists of the mission statement and shared goals that are developed by the owner, designer, contractor and subcontractors in a workshop before a project officially begins. The charter is signed by the attendees of the workshop.

5. Who do you recommend participate in the initial partnering workshop?

The owner, designer, contractor, major subcontractors and suppliers should attend a partnering workshop. Firms providing major testing and inspection services may also attend.

6. Why is the partnering charter a critical document in developing and maintaining a partnering relationship?

The charter document is critical for developing and maintaining a partnering relationship.

The process fosters a sense of ownership among the participants at the onset of construction, and provides an opportunity for team members to strategize towards a collective set of goals.

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7. What is an issue resolution system, and why is it a critical component of partnering?

An issue resolution system establishes a framework for conflict resolution at the lowest reasonable levels of chain-of-command, and provides a mechanism for systematic appeal through the chain-of-command. The system is a critical component of partnering, because each individual becomes responsible for and authorized to fulfill the goals of the charter.

The system further minimizes the number of trivial issues that require upper management's time.

8. What is a SWPPP, and why is it an important preconstruction planning tool?

Storm Water Pollution Prevention Plans are often a building code issue. Timing of installation of temporary erosion control and permanent storm water systems is critical to the contractor’s site logistics planning and construction scheduling.

Implementation of a SWPPP will also have a cost element which needs to be considered in the development of the general conditions estimate 9. What is “pull planning”, and why is it used for preconstruction planning?

Pull Planning is an element of Lean construction which identifies construction milestones and works backwards from them for development of short-term detailed construction schedules 10. What are the benefits of using off-site construction techniques?

Pre-fabrication of building components can improve safety, productivity and quality and can reduce construction waste and schedule durations.

Exercises: 1. You have been asked to organize a partnering workshop for a major hospital renovation project. Who would you invite to the workshop? What specific issues should be addressed in the development of the partnering charter?

Invitees include: hospital administrator, architect, structural designer, mechanical designer, electrical designer, general contractor (GC) officer-in-charge, GC project manager, GC superintendent, GC project engineer, major subcontractors, and medical equipment supplier. Issues to be addressed: project phasing, construction schedule, patient interface, cost control, quality control, safety, and traffic control.

2. Who should participate in the partnering workshop for the NanoEngineering Building?

Robert Smith, University of Washington; Norm Riley, ZGF Architects; Sam Peters, NWCC Officer-in-Charge; Ted Jones, NWCC project manager; Jim Bates, NWCC superintendent; Mary Peterson, NWCC project engineer; Ernie Sanchez, NWCC estimator; major subcontractor project managers; and major design consultants.

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Chapter 7

Subcontracting Review questions: 1. Why do general contractors use subcontractors rather than performing all the work on a project?

General contractors use subcontractors to minimize risk and overhead and provide access to specialized skilled craftsmen and equipment.

2. What risks do general contractors incur by using subcontractors?

General contractors incur risk through subcontracting due to the increased risk of scope overlap or gaps, reduced control over QC workmanship and safety, increased demands for coordination, scheduling conflicts between subcontractors, compatibility, and possible subcontractor bankruptcy.

3. Why might a project manager require performance and payment bonds from a subcontractor?

A project manager may require performance and payment bonds from a subcontractor to reduce, but not eliminate risk. Risks are posed by a subcontractor’s cash flow efficiency, which affects its ability to complete a task in accordance with the specifications and performance criteria, and by first and second tier subcontractors and suppliers that may lien the property. These bonds do not eliminate the risk of liens, but serve as an administrative control to reduce risk.

4. Why is a termination or suspension provision included in most subcontracts?

Termination and suspension clauses are commonly included in subcontracts so that the general contractor retains some control over contractual scheduling and performance criteria. A subcontractor that disrupts or delays the overall project schedule, fails to meet project specifications, or promotes safety hazards on a project may be terminated or suspended.

5. Why is subcontractor ‘bid shopping’ considered unethical behavior?

Bid shopping is considered unethical, because bids are submitted to a project manager or a general contractor under confidentiality. The general contractor will need competitive bids from subcontractors again. Therefore, loss of trust may affect the general contractor’s ability to bid competitively next time.

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6. Why do subcontractors need reasonable notice regarding the scheduled start times for their phases of work? Why does the superintendent not determine the exact start times for each subcontractor at the beginning of the project?

Subcontractors need reasonable notice from the general contractor, as they may be committed to numerous projects with conflicting labor and material requirements. An exact start date is not established early on, as it may easily change as the project progresses, but target dates are still established.

7. What are mock-ups, and how are they used for project quality control?

Mock-ups are full-scale samples of completed work. They allow the subcontractor to demonstrate workmanship and material aesthetics to the owner, architect and general contractor and to establish a quality control baseline for the remainder of the project.

8. How are subcontractors' requests for payment processed on a typical project?

Subcontractor requests for payment are typically processed in accordance with the payment schedule dictated by the subcontract, with a lien release processed upon payment. Subcontractors submit a monthly request for payment that the general contractor reviews and incorporates into its monthly request to the owner.

9. Why is a subcontractor's ability to finance its cash flow requirements on a project of concern to the project manager?

A general contractor is concerned with a subcontractor's financing capability, because the general contractor is responsible for completing the task that the subcontractor started, or committed to. In case cash flow is slow from the owner, the general contractor cannot allow the subcontractor to incur bankruptcy.

10. What is the difference between a request for quotation and a request for proposal?

What type of subcontract is awarded using a request for quotation? What type is awarded using a request for proposal?

A request for quotation, or RFQ, is a document generated by the contractor to solicit pricing or bids from a subcontractor or supplier. The contract awarded in the case of an RFQ is often a lump sum, or in the case of civil construction, a unit-price contract.

A request for proposal (RFP) may also request pricing, but the document may request additional information such as the contractor’s resume, financial strength, proposed organization, design or fee proposals, etc. The contract awarded in the case of an RFP may also be lump sum, but is often a negotiated contract such as cost plus fee and/or a guaranteed maximum price contract.

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Exercises: 1. Write a clear scope of work for a subcontract for the site work subcontract for the NanoEngineering Building.

Subcontractor agrees to provide all materials, labor, supervision, equipment (including safety equipment), supplies, and other items necessary or required to clear and prepare site for building construction and perform all such work in accordance with the contract drawings, specifications, and any addenda contained in the general contract documents for the construction of the NanoEngineering Building. The scope of work includes installation of tree protection prior to clearing, excavation and backfill of foundations and utility trenches, and installation of utility lines to within 5 feet of the building.

2. What are five criteria that you suggest be used to prequalify site work contractors for the NanoEngineering Building?

Previous experience with: sites of this size, past projects in Seattle, and the civil and soils engineers; plan for disposal site, access to acceptable fill material, wet weather plan, competitive price, ability to meet the schedule, financial solvency, access to suitable equipment, past projects on an active university campus, etc.

3. What basis do you suggest the project manager use to select the electrical subcontractors for the NanoEngineering Building?

Previous experience with: laboratory buildings, projects of this size, projects in Seattle, the electrical designer, competitive price, and ability to meet the schedule.

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Chapter 8

Material management Review questions: 1. Why is effective material management an essential project management function?

To ensure that materials are available to meet project schedule requirements. Deliveries should be scheduled to occur just before the materials are needed to support construction operations to avoid congesting the project site. Materials stored for long periods before use are exposed to greater risk of damage and weathering.

2. What type construction materials would a general contractor typically purchase on a long form purchase order on a project involving the construction of a four-story structural steel office building?

A general contractor would purchase structural steel and metal decking on long form purchase orders.

3. Why are submittals (i.e. shop drawings, product data, or product samples) required from suppliers? Who reviews these submittals?

The project designer reviews shop submittals to verify that the materials intended for installation are consistent with the building design.

4. Why are submittal approvals obtained before the supplier ships the required materials?

Submittals are approved prior to shipment so that the general contractor is not required to pay for unapproved materials.

5. How would you determine the required delivery date for the glazing system needed to construct the exterior walls for the NanoEngineering Building?

The required date for glass delivery could be determined by the superintendent and subcontractor from the project schedule. The scheduled delivery date should be a few days to one week prior to scheduled glass installation.

6. What criteria should a project manager use when selecting a material supplier for a project?

The project manager should consider the quality of a supplier's materials compared to the project specifications, quoted cost, and the supplier's ability to deliver the materials on time.

7. How does the organization of a job site affect material management efficiency on a construction project?

Sufficient space to receive materials, safely unload, store in a secure location, and protect from the weather.

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8. What is a purchase order? What are its main components? Why should a project manager keep a purchase order log?

A purchase order is a supply contract for materials. It should describe the material, amount required, and unit price, total cost, and expected delivery. A purchase order log summarizes all purchases, submittal progress, and expediting and tracking of open order deliveries.

9. Why might a project manager choose to pay suppliers for materials received before being paid by the project owner?

A project manager may pay a supplier before being paid by the owner in order to lock in a quoted price, take advantage of discounts, or keep the supplier solvent.

10. What criteria should the project manager use in selecting material storage areas on a construction work site?

Job sites should be organized to minimize distances between material storage areas and installation locations, protection requirements, whether materials may be transported by hand or machine, and to allow materials to be unloaded at the location where they may be stored.

11. Who is responsible for preparing submittals?

The general contractor, subcontractors, suppliers, and fabricators are all responsible for preparing submittals.

12. Who is responsible for approving submittals?

Submittals should be reviewed by the designers and the general contractor. The responsibility for approving them will be dictated by the contract terms but both parties should approve them in some manner.

13. What is the difference between a contract drawing and a shop drawing?

A contract drawing is prepared by the designer for the purpose of preparing a cost estimate and bidding on a project and providing an overview or design framework for construction. Shop drawings are prepared by suppliers and subcontractors and incorporate dimensional and connective details into the overall design.

14. List five items that would require a submittal on a wood-frame multi-family construction project.

Engineered lumber such as GLBs, Mechanical systems such as fire protection and HVAC, Concrete reinforcement, Carpet Samples and seam patterns, Paint or sealant product data sheets, Concrete redi-mix designs, Imported backfill, Glass and glazing, Kitchen Cabinets, Kitchen Equipment, etc.

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15. Why would a contractor not want the design team to completely design an item of work?

List three examples The contractor does not want the design team to completely design an item of work because it reduces the contractor's degree of freedom to select the most efficient means and methods of construction or installation. Examples include fire protection system, small-bore plumbing routing, electrical conduit routing, blocking and backing, concrete formwork or temporary shoring or scaffold, etc 16. How is a submittal considered part of the quality control process?

A submittal is considered part of the quality control process, because it serves as a final verification that the material, system or product to be ordered and installed meets the intentions and requirements of the designers. Submittals are also often subject to aesthetic consideration by the owner and architect.

17. How is a submittal considered part of the design process?

A submittal is considered part of the design process because it includes the most detailed designs that will be reviewed by the designer prior to construction, installation, or application.

18. List two different methods of numbering a submittal.

Submittals may be numbered sequentially or organized by CSI Section.

19. When is the submittal log reviewed?

A submittal log is reviewed weekly at owner/designer/contractor meetings.

Exercises: 2. What other materials would your foreman need to build a deck?

Concrete for footings, Post saddles, Posts, Beams, Handrail Materials, Stain or Sealer, Decking Material such as Trex ®, Stair Materials, etc

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Chapter 9

Project start-up Review questions: 1. Why does the project manager not initiate project start-up activities prior to receipt of the NTP? The project manager does not mobilize until the notice to proceed has been issued, because the contractor is not authorized to start work and incur costs until it has been received. Once mobilized, the general contractor begins to incur job site overhead costs that are not reimbursable if the owner decides to terminate the contract for convenience, unless mobilization had been authorized by the owner. But ‘planning’ for start-up can commence prior.

2. What are three factors that should be considered when planning the organization of a jobsite?

Factors that should be considered during project planning include material staging, safety of traffic patterns, relationships between temporary and permanent facilities, hoisting, storm water control, employee parking, union affiliations, and others.

3. What type of information should be shown on a jobsite layout plan?

A jobsite layout plan should show existing and proposed features, terrain, traffic and delivery flow patterns, entrance gates, project office location, laydown, hoisting, craft parking, storm water control, etc.

4. What is meant by the term ‘best-value subcontractors’?

Subcontractor team members should not be selected based solely on low bids. Other factors to consider should include: Reputation for schedule/quality/safety adherence, availability of manpower and equipment, approach to building with a team attitude, familiarity between subcontractor/GC/project owner/design team, and others.

5. What are the superintendent’s responsibilities during jobsite mobilization?

The superintendent is responsible for physical mobilization which includes arranging temporary power and telephone, mobilization of the project office, fencing and securing the site, installation of erosion and sedimentation controls, survey, etc.

6. What are the project manager’s responsibilities during job site mobilization?

During mobilization, the project manager is responsible to organize the project team, establish paper mobilization and management systems, which includes organizing project files, setting up logs, coordination of subcontractors, preparation of initial submittal packages for the owner, quality control plans, and safety plans.

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7. What are certificates of insurance, and why are they used?

The general contractor’s certificate of insurance ensures that the contractor has at least the minimum insurance coverage required by the contract. The general contractor should require similar certificates from subcontractors to ensure that all parties involved with a specific project are adequately covered. Project owners may also wish to be named as additional insured on these policies.

8. What is workers’ compensation insurance?

Worker's compensation insurance protects an employer against claims resulting from death or injury of an employee.

9. What are submittals, and how do they impact the construction schedule?

Submittals include shop drawings, product data sheets, or samples that must be approved by the project designer and/or owner prior to material delivery or installation. They verify that the purchased materials are consistent with the designer's intent. With respect to the project schedule, the designer must be provided with time to review, comment on, and approve the submittals.

10. What is meant by project buyout?

Project buyout is awarding of subcontracts and material purchase orders and comparing the actual cost to the budgeted cost. Individual subcontracts and purchase orders may be under or over the budgeted estimate, but the aggregate amount should not exceed the overall agreed amount between the prime contractor and project owner.

Exercises: 7. A) How much is the developer in Example 9 obligated to pay his subcontractors? B) How will these subcontractors approach a bid on the next project for this same developer?

A) Because the subcontractors are working under a T&M basis, the developer is obligated to pay what they spent.

B) Likely the subcontractors will continue to place low bids, assuming the developer will not hold them to their prices and contract with them on a T&M basis.

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Chapter 10

Project documentation and communications Review questions: 1. A journal or daily report is also known as a ____.

Daily job diary, daily journal, daily log, or superintendent’s diary.

2. List at least five important types of information that is recorded on a daily job diary.

A job diary should describe weather conditions, work performed, personnel or subcontractors working on a given day, accidents and injuries, deliveries, equipment usage, visitors, inspections, delays or impacts, and others.

3. Who should originate a diary?

The GC’s project superintendent and each subcontractor superintendent should prepare their respective diaries.

4. List three different types of logs COP, RFI, Submittal, Phone, Transmittal, Drawing, CCD, QC, Buyout, POs, and others.

6. How are as-built drawings created?

As-built drawings are created by surveying each task as it is completed and physically or electronically marking the construction set with actual conditions, locations, dimensions, and elevations.

6. List three types of record drawings.

Contract drawings, permit drawings, original estimate drawings, approved submittal drawings, and as-built drawings.

7. Who should chair the weekly jobsite safety meeting?

The GC’s project superintendent should chair the weekly safety meeting.

8. Who on the project management team is often responsible for preparation of meeting notes?

The GC’s project manager is responsible for preparation, or at least accuracy of the meeting minutes. The PE is likely assigned to take notes and prepare an early draft.

9. Why are RFIs used on construction projects?

RFIs are used on construction projects to clarify design conflicts or incompatibilities that arise once construction is underway and the relationships between building systems become more apparent.

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10. Why do some designers resist RFIs? Some designers resist RFIs because the design or construction administration budget may have been expended and the time to research and respond to each question may not be compensated. In addition, the RFI may result in a change order that poses an unanticipated cost to the owner.

11. Who should prepare an RFI? The general contractor, subcontractors or suppliers may originate an RFI, but the project manager (or PE designee) should review or prepare all RFIs submitted for the owner's or designer's response.

12. Are verbal RFI responses sometimes acceptable? If so, how should they be ultimately documented?

Verbal RFIs and responses are not acceptable unless they have been documented in writing. But oftentimes a verbal response may be provided in a rush situation, to be followed with a written confirmation.

13. Do all RFIs result in change orders?

Not all RFIs result in change orders.

14. What advantages do web-based project management systems offer over computerbased project management systems?

In web-based systems, project information and software are stored on the web instead on a computer or network server and are available to anyone who has been granted access. This is essentially an internet file cabinet. Communications have been expedited due to web-based project management software systems.

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Chapter 11

Progress payments Review questions: 1. How does the type of contract influence the format of the payment request?

The format of individual payment requests should reflect whether the contract was awarded on a cost-plus or a lump sum basis. Project costs and profit margins are tracked and reported differently under each type of contract. Cost-plus is open book, and lump sum is closed book. Cost-plus is billed after costs are reported, whereas lump sum projects forecast costs through the end of the month.

2. What is an SOV? Why is it required early by project owners?

The schedule of values establishes in advance what each major element of work will cost and provides the overall framework for demonstrating percent completion of a project. It establishes a record for consistent monthly tracking.

7. What type of data is submitted to support a payment request on a negotiated contract?

The client or the bank may require actual copies of subcontractor and supplier invoices, proof of general contractor expenditures, conditional and unconditional lien releases, observation of as-built drawing processes, schedule updates, etc. Regardless of what the client may request, the project manager should provide everything that is necessary to secure prompt and full payment.

4. What type of data is submitted to support a payment request on a lump sum contract?

Percent completion data calculated for each major division of work is shown on the schedule of values and supports a lump sum payment request.

5. What is retention? What is it used for?

Retention is the amount the owner retains or withholds from a pay request each month as leverage for timely completion of the work and submittal of the required close-out documentation.

8. What are standard retention rates today?

10% may be required for public projects but 5% is common.

7. What is a lien?

A lien is a legal property notice similar to a mortgage that informs owners and lenders that payment is owed on the property. Property that has been ‘liened’ cannot be sold until the lien is removed.

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8. What are interim lien releases used for?

Interim lien releases are submitted to the general contractor by subcontractors and from the general contractor to the owner with each payment request. The right to lien is waived upon receipt of payment for the current period.

9. Why are final lien releases requested by owners as part of the final payment process?

Final lien releases are required by the owner as assurance that the principal subcontractors and suppliers have been paid by the general contractor, prior to expiration of the payment bond. Final lien releases are submitted as part of close-out documentation.

10. How can slow payment from the owner affect the financial stability of a contractor?

Slow payment from the owner burdens the general contractor with financing the material, labor and subcontractor expenses for longer than was planned in the original estimate. The contractor may be required to borrow money to make its monthly bills if the owner does not make timely payments.

Exercises 4. How much retention would be held at the 70% completion point of a $200 million casino project under the following three different scenarios? A) 10% retention, B) 5% retention, and/or C) 10% retention held until the project is 50% complete and no further retention held after that. $200 mil at 70% = $140 mil. A) 10% of $140 mil = $14 mil, B) 5% = $7 mil, C) 50% of $200 mil = $100 mil at 10% = $10 mil.

5. Why are public projects, such as a county sewage treatment station or elementary school, not subject to liens?

Cannot foreclose on a public project, such as a sewer system, and force an auction or sale.

6. Regarding the pay estimate Example 11: A) Was the project owner within his contractual right to delay payment? B) Was he ethical to do so? C) Do you suppose the PE or PM were terminated because of their actions?

A) Likely yes, within contractual rights, but B) Unethical, and C) Actual result: The PM was not terminated, but the PE was let go on his next project for other reasons.

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Chapter 12

Cost and time control Review questions: 1. What are four uses of actual project cost data?

Four uses of project cost data are: (1) to establish a historical database for future estimates, (2) to identify problems that require corrective action, (3) to quantify management efficiency, (4) to satisfy reporting requirements to the owner for progress payments, and others.

2. Why is the original cost estimate corrected based on buyout data?

The original cost estimate is corrected for buyout to reflect the value of each subcontract that is entered into and provide a foundation for accurate progress payments and cost control reporting and management.

3. What three types of project costs present the greatest risk to the project team?

Direct labor, equipment rental and utilization, and jobsite overhead costs pose the greatest risks to the contractor.

4. Why are cost codes used for monitoring actual project costs?

Cost codes provide a systematic tracking and accounting mechanism for the itemization of all costs incurred during construction. When formatted to reflect the numerical structure of the contract specifications, cost codes directly link the descriptive elements of the specifications with the capabilities of a computerized database.

5. What are project labor curves used for?

Project labor curves are used to compare budgeted versus actual labor hours or manpower on a project to evaluate whether a task or project is behind or ahead of schedule.

6. What is a foreman’s work package cost-control worksheet used for?

The foreman's work package cost-control worksheet is used to itemize and track costs incurred daily or weekly for an item or system of work. In addition to providing immediate feedback to the field, these work packages are used on a monthly basis in support of the contractor’s forecasting efforts.

7. How frequently should a project manager develop a forecast of the estimated cost to complete a project?

The project manager should develop or update the project forecast on a monthly basis to coincide with the project billing and reporting cycles.

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8. What are as-built estimates used for?

As-built estimates are used to compare budgeted to actual costs, evaluate the accuracy of the estimate, identify causes for inaccurate predictions, and contribute to a historical database to refine future estimating efforts.

9. What are as-built schedules used for?

As-built schedules are useful for comparing predicted to actual activity durations and can be used for future schedule efforts. They may also identify causes of project delays and/or cost overruns.

10. What is an earned value analysis used for?

Earned value curves allow real-time analysis of the rate of production and budget expenditures, over the course of the project by combining both planned and actually schedule and cost data. It is a more accurate tool than work packages, cash flow curves, or project labor curves. The data supports project forecasting and cost and schedule control efforts.

11. What would the cost codes be on the NanoEngineering Building for: a. Carpet sub? b. Concrete placement? c. Reinforcing steel purchase?

Based on the system presented for the NanoEngineering Building, and standard CSI specification sections, the following cost codes would apply: (a) Carpet……………………………………………………………...9821.096000.4 (b) Concrete placement………………………………………………..9821.033000.1 (c) Reinforcing steel purchase……...…………………………………9821.032000.3 Exercises: 4. Referring to Figures 12.4 and 12.5 earned value curves, if each of these work packages proceed at the same trend, when will they complete and what will be the final hours over or under budget?

12.4: Complete day 8, 4 days ahead of schedule, and expend approximately 64 hours, 56 hours under budget.

12.5: Complete approximately day 15, 3 days behind schedule, and expend approximately 180 hours, 60 hours over budget.

6. Other than the examples listed earlier what three typical assemblies or systems would warrant development of a foreman’s work package?

Any CIP concrete system, rough carpentry, finish carpentry, punch window installation, door and hardware, casework, site concrete, specialties, and others.

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Chapter 13

Quality management Review questions: 1. What is the primary objective of quality management programs?

The primary objective of a quality control program is profit, in the short-term, by maximizing both quality and efficiency and reducing rework. Some of the long-term objectives include reputation and marketing for the firm.

2. What four processes are used in managing quality on a construction project?

The four processes used in managing quality are (1) establishing standards, (2) inspections, (3) managing corrections and (4) documenting the corrections.

3. Why are project-specific quality control plans needed? Why are generic quality control plans not acceptable?

Project-specific quality control programs are needed to address the unique requirements of each work package and project. General procedures are not acceptable because material and performance specifications, codes and environmental exposures vary from project to project.

4. What are mock-ups, and why are they used?

Full-scale mock-ups are completed samples of work that are to be used to measure the quality control for all subsequent work. Mock-ups exhibit specified products or systems for assessment of the contractor's workmanship, small-scale performance testing, and material aesthetics.

5. Why should quality control inspectors be involved in the submittal process?

Quality control inspectors should be involved in the submittal process to verify that the submitted materials meet the specifications and are the same products that are actually delivered and installed.

6. Why should subcontractors not be allowed to build over work that was improperly done by a previous subcontractor?

Subcontractors should not be allowed to build over work that was improperly installed by a previous subcontractor in order to maintain accessibility to the problem areas and minimize the extent of potential corrections. If work is covered and the final product is unacceptable, it can be difficult to prove which subcontractor caused the inferior work.

7. Why are materials that are stored on site periodically inspected?

Materials stored on site are periodically inspected to document whether damage has occurred due to weather exposure and may also be performed to verify inventory or that no substitutions have been made since the time of delivery.

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8. What is the purpose of a pre-inspection?

The purpose of a preparatory inspection is to assess the quality of a mock-up, or phase of work, prior to beginning another pertinent phase of work and to also assure that all required surface or preparatory work is complete before the next phase commences.

9. What is the purpose of an initial inspection?

The purpose of an initial inspection is to verify that the demonstrated level of workmanship meets the plan and provides a baseline for continued work.

10. What is a prefinal inspection, and when is it conducted?

A prefinal inspection is performed once work is nearly complete in order to prepare a final punch list.

Exercises: 1. What quality control organization do you recommend the contractor use on the NanoEngineering Building?

The project was large enough that the contract required a full-time quality control inspector. Therefore, the quality control team would include the general contractor's quality control inspector, the project superintendent, the architect, the owner's representative, city inspectors, and outside third-party structural, soils, and roofing inspectors.

2. What are mock-ups the general contractor should require subcontractors to construct for the NanoEngineering Building?

A laboratory completed with all finishes, lab casework, and equipment; Stone Cladding; Window Wall System; etc.

5. List out five examples each of ‘active’ and five examples of ‘passive’ quality control Active: Sub pre-qualifications, Sub short-lists, Project Specific QC plans from subs, Project Specific QC plans from GC, Employing and utilizing 3rd-party inspectors, early punch lists, Masking before you paint, Submittals, RFIs, NCR Lists..

Passive: Generic QC plans, VE the inspectors out of the job, No background checks on subs, Repairing poor work – post affect, Owner/Architect not requiring submittals and/or negative attitude towards RFIs, …

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Chapter 14

Safety management Review questions: 1. What are the four prime causes of injuries on construction projects?

Four prime causes of construction injuries are: (1) falling, (2) electrical shock, (3) being crushed between two objects and (4) being struck by an object.

2. What is OSHA’s role in safety management on construction sites?

OSHA's role in construction site safety is the establishment of safety standards and performance of compliance inspections.

3. Why is job site safety a significant project management issue?

Job site safety is a significant project management issue because safe working conditions foster productivity and job site morale, indirectly contributing to profits, while accidents pose direct and indirect costs on a project.

4. What are four costs that can result from a construction site accident that typically are not covered by insurance?

Four costs that may result from a construction accident that may not be covered by insurance include: (1) consequential fines, (2) down time, (3) damaged materials or equipment and (4) lawsuits.

5. What is the purpose of a job hazard analysis? What three elements are involved in the analysis?

The purpose of a job hazard analysis is to eliminate unsafe conditions and train workers to construct tasks safely. The three elements of this analysis are: (1) identify the construction activities that will take place on the project, (2) identify the hazards associated with each activity and (3) prepare a plan to mitigate each hazard.

6. What are three ways to reduce the risk created by a hazard on a job site?

Three ways to reduce risk associated with a job site hazard are: (1) train workers, (2) provide personal protective equipment (PPE), and (3) consider safety when selecting a construction method.

7. Why is substance abuse an important safety issue on a construction job site?

Substance abuse is an important safety issue to a number of hazards such as heavy equipment, reduced visibility and hearing conditions, falling and tripping hazards, and power tools. Impaired judgement poses a safety hazard to all workers on the site, as well as bystanders and property owners.

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8. How are substance abuse programs in the construction industry typically administered?

Substance abuse programs are typically administered by random or periodic drug and alcohol testing. Subcontractors may be required to administer their own programs. Third parties are used to administer testing programs to ensure fairness in implementation and compliance with legal requirements.

9. What are four types of personal protective equipment (PPE) that are commonly used on construction projects?

Personal protective equipment employed on a construction site include: (1) hard hat, (2) hearing protection, (3) eye protection, (4) hand protection, (5) safety shoes, (6) yellow or orange safety vest, and (7) other protective clothing such as long sleeve shirts, long pants, no loose clothing, welding protection gear, etc.

10. What is a hazardous materials communication program? Why does OSHA require its use?

Hazardous materials communication is a federal program designed to inform workers of chemical hazards encountered on the job. The program includes training, labeling on containers, and material safety data sheets (MSDS). OSHA requires that employers inform workers of these hazards under right-to-know provisions. The intent of the program is to protect workers from occupational exposure and to protect employers from wrongful allegations of exposure.

11. What are material safety data sheets? Why are they used on construction sites?

MSDSs summarize safety data for materials used on site. These are used to communicate hazards, safe working procedures for storage and handling, and basic emergency response information to all firms, agencies, and on-site personnel.

12. What is a phased, project-specific accident prevention plan? Why is it prepared?

A project-specific phased safety plan is an accident prevention program tailored for each individual construction site and implemented prior to the onset of construction. These plans may be prepared at the request of an owner, or as an administrative safety standard, for the purpose of preventing accidents and minimizing the impacts of accidents as well as protecting or improving safety records.

13. What are three objectives of a job site accident investigation?

Three objectives of a job site accident investigation are: (1) determine what happened, (2) investigate why the accident happened, and (3) identify policies or procedures that could minimize or prevent recurrence.

14. What type of information must be reported to OSHA regarding a construction injury in which a worker broke his or her leg?

An accident report to OSHA must describe the injury, date, time and location of the accident, explain how or why the accident happened, what kind of safety equipment was being used at the time of the accident, and propose measures to prevent recurrence.

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15. What is EMR? How does it affect a contractor’s labor rate?

EMR stands for Experience Modification Rating. This is an adjustment to the base workers-compensation insurance rate. Discounts are available to firms with ratings less than one, and penalty fees are assessed against firms with safety ratings greater than one.

There is a direct correlation between the EMR factor and the cost of labor; the higher the EMR, the higher the direct labor cost through higher insurance rates which are reflected in labor burdens or labor taxes.

Exercises: 4. What can you tell about a general contractor who has an EMR of 1.8? 0.4?

1.8 – accident prone (and higher insurance rates), 0.4 – safe work practices (and lower insurance rates).

5. Which construction trade is likely to have a higher workers’ compensation base rate: steel erector or landscaper? Drywall installer or roofer? Carpet installer or high voltage electrician?

Steel erector, roofer, and high voltage electrician.

6. List five examples of passive safety control and five examples of active safety control: Active: Pre-qualify subcontractors, Project Specific Safety Plan from GC and from Subs, Guard rails and hand rails, PPE, Early morning stretch, Safety orientation for new employees, Safety meetings, Routine visits from the corporate safety inspector, Request inspections from OSHA, Write-up subs/back charge for infractions, …

Passive: Generic Safety Plans, Company awards dinners, Putting guard-rail up after someone has fallen, VE the safety inspector out of the job, …

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Chapter 15

Contract change orders Review questions: 1. What is a change order to a construction contract?

A change order to a construction contract is an official contract modification to the original contract price and/or time, due to a change in the scope of work. The change order may be an addition to or a deduction from the original contract price.

2. What are five causes of change orders on a typical construction project?

Causes of changes orders on a construction project include: Design errors, changes requested by the owner, unforeseen site conditions, product or material unavailability, adverse weather conditions, and others.

3. Why does using owner-furnished equipment on a project sometimes result in change orders?

Using owner-furnished equipment may result in a change order if the equipment arrives late and holds up activities that are contingent upon installation of the equipment, lack of design coordination, and others.

4. What is the difference between an owner-initiated change order proposal and a contractor-initiated change order proposal?

An owner-initiated change order proposal typically results from an increase or reduction in the original scope of work. A contractor-initiated change order proposal results from unanticipated field conditions or from the architect's response to an RFI. 5. How do designer responses to RFIs sometimes result in change orders?

Designer responses to RFIs may result in a change order when a detail is clarified that was not indicated in the overall design or when design incompatibilities become apparent and must be corrected.

6. What factors should a project manager consider when analyzing the impact of a proposed change order on a construction project?

A project manager should consider whether direct costs will be incurred as a result of the change order, whether the schedule will be impacted, and whether certain activities should be accelerated or compressed in order to prevent schedule impacts.

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7. What recourse does a project manager have if the owner denies a change order proposal?

If an owner denies a change order proposal, the project manager should request a construction change directive that documents the change in the scope of work and provides a mechanism for negotiation of cost and schedule impacts at a later date.

Other recourses include not doing the extra work or submitting a claim. But the contractor should review contract language.

8. How does a change order proposal become a change order?

Change order proposals (COPs) submitted by the contractor are periodically (typically monthly) incorporated into formal contract change orders. More than one COP may be referenced in a single change order for incorporation into the contractual scope and budget.

9. What is the difference between a change order and a construction change directive?

A change order includes an agreed price for the change in the scope of work, while the construction change directive can be issued prior to agreement on impacts to the budget and schedule.

10. What action does a project manager take upon receipt of a construction change directive?

Upon receipt of a construction change directive, a project manager should prepare a change order proposal identifying anticipated impacts to budget and schedule. The project manager should also notify subcontractors and suppliers who may be impacted.

11. Why might an owner decide to issue a construction change directive?

Reasons for a CCD might include: Change needs to be implemented immediately; not happy with the contractor’s pricing; contract procedural requirement; corporate philosophy; architect’s preferred process; and others.

Exercises: 3. Why might contractors not submit formal separate COPs for every $100 issue?

The cost to prepare the change order is more than it is worth. Also, this would reflect a nickel and dime attitude towards the project owner.

5. Regarding Example 15: A) What was the GC PM’s ultimate goal?

A) The ultimate goal is to be paid what it cost and in a prompt manner.

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Chapter 16

Claims and disputes Review questions: 1. What are three potential causes of claims on a construction project?

Potential causes of claims on a construction project are: (1) schedule acceleration, (2) change orders (especially the combined effects of multiple change orders), (3) owner delays, and (4) unresolved COPs. 2. What is mediation and how is it conducted?

Mediation is a negotiation process facilitated by a neutral third party. The opposing parties communicate and exchange their positions through the third party mediator, until an agreement is reached. The mediator does not render a decision, and no record of the proceeding is kept.

3. What are the differences between mediation and litigation? What are the similarities?

Litigation is similar to mediation only in the case that a court of law serves as a neutral third party. They differ on several fronts. The court renders judgement in the case instead of facilitating a mutual agreement. Litigation is expensive and time consuming.

Attorneys present each party's case to the court, and the proceedings are documented.

The judge's decision is binding, but may be appealed at further expense, etc.

4. What is arbitration and how is it conducted?

Arbitration is a formal dispute resolution procedure administered by the American Arbitration Association (AAA). The AAA appoints a neutral third party to the case who is tasked with issuing a binding or nonbinding decision. The actual arbitration proceedings are similar to a trial.

5. What is a dispute resolution board (DRB)? When are its members selected?

A dispute resolution board is established prior to construction and is comprised of industry experts. The owner selects one board member, the contractor selects the second board member, and the first two board members select the third member. The board members stay abreast of progress during construction and meet periodically to hear complaints. The board's judgment is non-binding.

9. Why do dispute resolution board members make periodic visits to the construction project site?

Dispute resolution board members visit the construction site periodically to become familiar with the site and progress. This enables the board to issue a project-specific recommendation based upon personal knowledge of overall site conditions.

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7. What would be the advantages and disadvantages of a single third-party neutral to a) DRBs or b) mediation? a) The advantage of a single third-party neutral over a three-person DRB would be cost. Also maybe easier to have one individual knowledgeable about the project and/or easier to schedule for meetings b) A neutral would be involved with the project throughout, and therefore more knowledgeable than a mediator 8. Why do courts typically find in favor of previous DRB recommendations?

The client and the contractor (the ‘parties’) chose the Board members, therefore who is the judge to over-turn? Also the Board members are knowledgeable in construction, whereas the judge or a jury is not 9. What is the discovery process that is used in litigation?

The discovery process consists of investigative research, interviews and depositions with witnesses and experts that take place in preparation for a court trial.

10. Why is litigation generally the most expensive of the methods of dispute resolution discussed in this chapter?

Litigation is the most expensive process of negotiation due to the number of attorneys involved, the number of people who must be interviewed, the overall time for conclusion, court costs, and often the number of consultants hired to investigate or verify. These parties are compensated for their time during the discovery and trial periods, both of which may be expensive. Additional costs may be incurred in the event that funds are withheld until a final judgement is reached.

Exercises: 1. Assume a contractor has a contract to construct an elementary school. Assume the ConsensusDocs® 500 contract applies here also. The project manager believes the contractor is owed additional time and money because of an owner-caused delay. What procedure should the project manager use in submitting the claim?

First try the change order proposal process. If this fails, the contract dictates mediation first, and if still no resolution, then arbitration.

2. How can the partnering techniques discussed in Chapter 5 be used to resolve issues between the contractor and the owner?

The issue resolution system developed during the partnering workshop should be used to resolve issues.

3. Assume you are the project manager for Northwest Construction Company on the NanoEngineering Building and have a dispute with the owner. You and the owner have decided to use mediation to attempt to resolve the dispute. What experience and abilities are you looking for when you select the mediator?

Someone who is knowledgeable of research laboratory construction in Washington State, has mediation experience, understands negotiated GMP contracts, and has a reputation

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for being fair and unbiased.

4. As project manager for Northwest Construction Company for the NanoEngineering Building, you are required to nominate a member for the dispute resolution board. What criteria would you use to select a nominee?

Someone who is knowledgeable of research laboratory construction in Washington State, has dispute resolution board experience, understands negotiated GMP contracts, and has a reputation for being fair and unbiased.

5. As project manager for Northwest Construction Company for the NanoEngineering Building, you have been asked to prepare an agenda for the quarterly site meeting of the dispute resolution board. What agenda would you propose?

Job site walk, attend weekly coordination meeting, review outstanding change order proposals, review board meeting minutes from last visit, review written presentation of any open dispute issues the team wishes the board to review, listen to verbal presentations, review supporting and contract documentation, re-walk the site, prepare a response and recommendation for team review, and establish the next meeting time.

6. Assume you are the project manager for a construction company with an average annual volume of $500 million, spend 1% on home office overhead, and routinely realize 2% in pre-tax pure profits. Your own project is scheduled to last two years and has a contract value of $100 million, 5% of which are for jobsite general conditions. Mid way during construction your client has delayed your project for one year at no fault of your own. Prepare two claims: a. Jobsite overhead costs. Can you recover 100% or what would you do with your people and equipment during this one year shut-down? b. Utilize the Eichleay Formula to prepare a claim for impacts to home office overhead and fee. a. The contractor may try to charge for 100% of the jobsite general conditions cost for one year, which in this case would be approximately $2.5 mil (½ of $100 mil x 5%).

It is very difficult to collect on jobsite general conditions. The contractor would have a duty to mitigate the cost impacts, which involves finding other work for their employees and equipment. Remobilizing with the same people or training new people would likely be more of an impact that could be argued and collected. b. This project represents 10% of the company’s volume ($100m x .5 of $500m).

10% of 1% home office overhead would be $500,000 ($500m x .01 x .1). 10% of the profits would be $1mil ($500m x .02 x .1). Therefore a total claim of approximately $1.5m would be requested. The Eichleay Formula is very complex, more so than in this simplified example. It is very difficult for contractors to prove true impact costs and collect.

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Chapter 17

Project close-out Review questions: 1. What action should the PM take if he or she believes that some of the punch list items are outside the scope of the contract?

The project manager should negotiate scope, cost and payment with the owner for any punch list items that are beyond the original scope of work prior to those items being corrected.

2. Why is substantial completion a significant contractual milestone?

Substantial completion signifies that the project may be used for the purpose that it was intended, all contractual terms have been achieved, and the GC’s liability for LDs has ended.

3. Who issues the certificate of substantial completion?

The architect issues the certificate of substantial completion on behalf of the owner.

4. Who issues a certificate of occupancy?

The municipality that issued the building permit issues the certificate of occupancy.

5. What are final and unconditional lien releases?

The general contractor submits a final and unconditional lien release to the owner once all of the financial obligations under the contract have been met. Once the release has been submitted, the general contractor waives the right to lien the owner's property for additional payment. This release is given in exchange for receipt of final payments and release of any retention.

6. Where does the PM obtain the information for the O & M manuals that are submitted to the designer for approval?

The project manager obtains product information and maintenance and repair instructions from subcontractors and suppliers.

7. When does the warranty period begin?

The warranty period starts at substantial completion except for any portion of the work, such as the landscape, that is completed after substantial completion. Warranty on late finish items starts when they are accepted by the owner. Warranty would start earlier for any portions of the work the owner occupied prior to substantial completion.

8. From whom should the PM obtain written warranties?

From all subcontractors and suppliers used on the project.

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9. Where would you determine which components require warranties that are longer than the one year required in the general conditions?

The supplemental or technical specifications of the construction contract.

10. Why is warranty response an important customer service?

Owners expect timely response to warranty claims. Contractors who are slow at responding to warranty calls may not be invited to submit proposals on future construction projects.

Exercises: 5. Draw a flow chart of the material procurement process starting at the selection of the supplier and ending with receipt of the product warranty.

RFQ to suppliers > Receive bids > Analyze and award to best-value supplier > Issue PO > Establish expediting and submittal logs > Receive and review submittals > Designer approve submittals > Supplier fabricate and deliver materials > GC inspect materials upon delivery > Installation > Inspections > Prepare punch list > Correct punch list > Final PO modification > Receive O & M, including warranty > Final lien release > Final payment including retention release if applicable.

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Chapter 18

Construction project leadership Review questions 1. Why do you feel there have been very few books written specific to construction leadership?

Most college textbooks are written by professors. There are very few courses dedicated just to the topic of construction project leadership. Many likely feel that ‘leadership is leadership’ regardless of the industry (we disagree – construction is unique), therefore construction doesn’t have its own leadership book.

2. Who is one of your favorite famous political, military or sports leaders? Why them?

This is a personal choice. There are an infinite list of possibilities.

3. Of all of the ‘traditional’ leadership theories, which one applies to construction leaders the best?

This is a personal choice, but most feel it is not 100% democratic, but participative does play a role. The answer to most scenarios is ‘it depends’ upon the situation, therefore ‘situational leadership’ is likely most applicable in construction. Many field leaders have a combination of different leadership tools in their respective toolboxes.

7. Of our top 10 leadership traits, which one do you feel should rank first?

This also is a subjective question, and although all are important, ‘communication’ clearly ranked at the top of our industry survey results.

The balance of our questions are very open-ended and depend upon the individual’s personal experiences. Biases will play a part here as well.

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Exercises: 1. Develop an inner-circle diagram similar to Figure 18.2 for: A) Project manager, B) CEO, C) project engineer, D) the client, and/or E) yourself. a. The PM’s inner circle would likely include the PE, superintendent, GC’s OIC, owner’s rep, architect, family, friends, other GC PMs, and sub PMs. b. The GC’s CEO’s inner circle would likely include other corporate officers, family, friends, business associates, the client’s CEO, the GC’s supporting consultants including attorney and accountant, and maybe the PM or SPM. c. The PE’s inner circle would likely include the PM, other GC PEs, family and friends, superintendent, and subcontractor PMs. d. The client’s inner circle would be similar to the GC’s CEO’s inner circle.

2. Looking back at Figure 18.1, how do you see the circles over-lapping with respect to: A) construction CEO, B) project engineer, C) structural engineer, D) journeyman carpenter, and/or E) yourself?

Responses depend upon an individual’s background but likely ones include: CEO: separate and mostly L; PE separate and mostly M; Engineers: overlapped L & M, maybe more M; Carpenter: separate and mostly M.

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