Project Management. Total Construction. George J. Ritz Sidney M. Levy. Second Edition. Graw. Hill

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1 Total Construction Project Management George J. Ritz Sidney M. Levy Second Edition Mc Graw Hill Education New York Chicago San Francisco Lisbon London Madrid Mexico City Milan New Delhi San Juan Seoul Singapore Sydney Toronto

2 Contents Preface xvii 1 The Construction Management Environment 1 Some History of the Construction Process 1 Where Do Managers of Construction Projects Come From? 3 How Large Is the Construction Industry? 4 Defining Construction Project Management 7 What Is a Construction Project? 7 What Are the Project Variables? 11 Project Goals 12 Goal-Oriented Project Groups 13 The Owner/Client's Goals 13 The Project Team's Goal 14 The Architect/Engineer's (A/E) Goals 14 The Construction Team's Goals 15 The Construction Team's Personal Goals 16 Basic Construction Project Management 16 Philosophy What Are We Going to Plan, Organize, and Control? 17 Construction Manager's Job Description 19 Project Size 21 Project-Size Ratios 21 2 Bids, Proposals, and Contracts 23 Construction-Execution Approach 24 Owner-Contractor Operating Mode 28 The Contractor-Selection Process 28 The Owner's Input 29 Contractor Selection 29 Contractor Screening 31 Preparing the Request for Proposal (RFP) 34 Evaluating the Proposals 36 Developing Construction Proposals 38 The Proposal Goals 38 The Construction Manager's Role in Proposal Development 39 The Construction-Site Survey 40 V

3 VI Contents Reviewing the Pro Forma Contract 43 Construction Contracting 43 Contract Formats 45 Build-Operate-Transfer 51 Bridging Another Approach to Design-Build 55 Lean Construction and the Lean Construction Institute 57 Engineers Joint Contract Documents Committee (EJCDC) 58 Contract Administration 58 Notice to Proceed 66 Summary 66 3 Project Planning and Initiation 67 Planning Philosophy 68 Types of Planning 69 Operational-Planning Questions 70 The Construction Master Plan 70 The Construction Manager's Role Project-Execution Formats for Capital Projects A Typical Construction-Project Format 74 Owner's Conceptual Phase 75 Proposal Phase 76 Project-Execution Phase 77 Preconstruction Activities 77 Construction Input 78 Constructability Analysis 78 Procurement Activities 78 Project-Control Functions 79 The Owner's Field Representative (OFR) 80 The Role of the Contractor 80 Major Field Activities 81 Activities 83 Facility Start-Up Construction-Project Initiation 84 Project-Initiation Checklist 84 Summary 86 4 Construction Scheduling 89 Three Basic Types of Schedules 89 Five Key Questions When Preparing a Schedule 90 Scheduling Approach 91 Owner's Schedule for Design-Bid-Build Contracts 91

4 Contents vii Owner's Schedule for Third-Party Constructor Contracts in the Private Sector 96 Project-Execution and Scheduling Philosophy 98 Proposal Schedules 99 Detailed Field Scheduling 99 Scheduling Systems 100 Bar Charts 100 CPM Schedules 100 CPM Pitfalls to Avoid 101 Activity Float: What It Is and the Importance of Durations 101 Who Owns It 102 Shop-Drawing Submission Schedules 102 Precedence Diagramming Method (PDM) 103 Summary Estimating, Budgeting, and Cost Control 107 Estimating Sources 107 The Need for Identifying and Isolating Construction Components in the Estimate 108 UniFormat 109 Construction-Cost Estimating 114 Types of Estimates 119 Level 1: Order of Magnitude 120 Level 2: Conceptual Estimating 120 Level 3: Design Development 120 Level 4: Construction Documents 121 Level 5: Hard Bid Submission 121 Percentage of Accuracy 122 Appropriation Estimates 123 Cost Trending for Large Projects 123 Estimating the Cost Estimate-Effectiveness Concerns 124 The Prime Elements of an Estimate 125 The Role of the Project Manager (PM) or CM in Making a Detailed Estimate 126 Construction-Site Survey and Report 128 What Is a Geotechnical Report? 129 Unclassified Site Work 136 Labor Posture and Contracting Plan 137 What Works to Improve Efficiency? 138 Estimating Temporary Requirements Indirect Costs in the Field 138 Site Facilities 139 of a Good Estimate 140

5 yiii Contents Budget Format 140 Front-End Loading 141 Summary Project Resources Planning 143 Human-Resources Planning 143 The Changing Face of the Construction Workforce 144 Practical Personnel-Loading Curves 145 Planning the Construction-Project Personnel 153 Planning Field Supervisory and Staff Personnel 153 Planning the Completion of the Project as Construction Is Just Beginning 154 The Numerous Inspections, Tests, and Accompanying Reports Also Required as Part of the Closeout Documents 155 Building Commissioning 156 Construction Subcontracting 157 Construction-Material Resources Planning 158 Long-Lead Materials 159 Special Materials and Alloys 159 Common Materials in Short Supply 160 Special Construction Equipment 160 Services and Systems 160 Transportation Systems 161 Financial Resources 161 Summary Project Organization 163 Organization Overview 163 Organizational Design 164 Corporate Organizational Structure 165 Constructing the Project Organization Chart 169 Typical Project Organization Charts 169 Construction Organization Charts 170 Field Superintendent 170 Field Staff 172 Field Engineering Group 173 The Integrated Project Organization Chart 174 Selecting and Motivating the Project Team Selecting the Project Team 175 Motivating the Project Team 176 Writing Job Descriptions 176

6 Contents ix Project Mobilization 176 Shop Drawings 178 Change Orders 178 Requests for Information (RFIs) 179 Daily Reports 179 Drawing and Specification Revisions 180 Organizational Procedures The Field Procedure Manual 181 The Typical Contents of a Field-Procedure Manual 181 Introduction 181 Project Description 185 Contractual Matters 185 Project Organization 185 Project Personnel Policies 185 Project Coordination 186 Planning and Scheduling 186 Project Procurement Procedures 186 Field Warehousing Procedures 187 Heavy Equipment and Small Tools 187 Project Estimating 188 Project Control and Reporting 188 Site Safety and Security 188 Change Orders 188 Design Procedures 189 Issuing the FPM 189 Interoffice Coordination Procedures 189 Summary Project Control 191 The Control Process 191 Areas of Control 192 Controlling the Money Plan 192 Cost-Control Definitions 192 Cost-Control Philosophy 193 Cost-Control System Requirements 194 A Typical Cost-Control System 195 Staff Functions 197 Line Functions 197 How a Cost-Control System Really Works 198 Controlling Labor Costs 199 Changes in Labor Rates 199 Variations in Productivity 202 Improving Construction Productivity 203 Under-running the Labor Hours 210

7 X Contents Controlling Material-Resource Costs 212 Reviewing a Cost Report 213 Is There a Cost-Control Problem in Figure 8.11? 213 Cost-Control Summary All Areas 215 Escalation and Contingency 217 Specific Areas for Cost Control 218 Procurement-Cost Control 218 Construction Costs and the Argument for Negotiated or Design-Build Work 222 Conducting a Constructability Analysis 223 Developing a Contracting Strategy 223 Planning Temporary Facilities and Utilities 224 Planning Heavy-Lifting Equipment and Associated Equipment 224 Assigning Lay-Down and Work Areas On-Site 224 Organizing the Field Supervisory Staff 225 Establishing me Construction Philosophy 225 Setting Field-Personnel Mobilization and Demobilization Procedures 225 Field Personnel Leveling and Field Productivity 226 Cash Flow 226 Cash-Flow Curves 227 Cash Flow on Lump-Sum Projects 227 Change-Order Work and Cash Flow 228 Schedule Control 228 Monitoring the Schedule 228 Measuring Physical Progress 229 Planned Versus Actual Physical Progress 229 Ways to Improve the Schedule 231 Monitoring Procurement Commitments 231 Monitoring Field Productivity 232 Controlling Quality 234 Benchmarking 236 International Organization for Standardization (ISO) 236 The Six Sigma Approach to Quality Control 237 Operating the Controls 238 Establish Priorities 238 Control by Exception 238

8 Contents xi Keep Looking Ahead 238 Have a Quick Reaction Time 239 Be Single-Minded 239 Summary Construction-Project Execution 241 Construction-Project Execution 241 Basic Project Parameters 242 Construction-Project Initiation 242 The Project-Kickoff Meeting for Design-Bid-Build or Negotiated Projects 245 Record Drawings 246 Inspections and Testing 247 The Project-Kickoff Meeting for a Design-Build Project 248 The Project-Kickoff Meeting for a Construction-Management Project 248 Key Questions to Ask Subcontractors during Negotiations in Any Contract Mode 249 Additional Items That May Need to Be Addressed with Mechanical, Electrical, and Plumbing Subcontractors 250 Warranties and Guarantees for Electrical and Mechanical Work 250 Implementing the Project Organization 251 The Field-Procedure Manual 252 Finalizing the Project Budget and Schedule 253 Risk Analysis 254 Bonds and the Bonding Process 254 The Bonding of Subcontractors 255 Owner- or Contractor-Controlled Insurance 255 Change Orders 256 The Owner Adds or Deducts Scope 256 The Owner or Architect Delays in Responding to Requests for Information or Clarification 257 Site-Work Unknowns Come Unburied 257 Errors and Omissions in the Plans or Specifications Are Discovered 257 Different Interpretations Scope of Work Required Arise of the of the Contractor or Subcontractor 258 Ensure That Change Orders Include All Costs 258 Handling the Paperwork 260 Discovering the Job's Critical Areas 261

9 xii Contents Operating the Construction Quality-Control Systems 262 Documenting the Project 263 Some Danger Signs That Require Documentation 263 Documentation Is All-Encompassing 264 A Picture Is Worth a Thousand Words 265 The Owner, Constructor, and Designer Interfaces 265 Fast-Track Project Problems 267 Project Safety and Security 268 Site Security 270 Project-Completion Phase 270 Project Completion When the Project Is a Process Facility 271 Construction-Project General Phaseout Activities 272 Building Commissioning 274 Guideline An Abbreviated Version 274 A Word about Lien Waivers 276 Summary Total Construction Project Management for the Twenty-First Century 279 Interoperability 279 National Institute of Standards and Technology 280 International Organization for Standardization (ISO) 281 CIMSteel Integration Standards, Version Building Information Modeling (BIM) 284 BIM Benefits During the Design Stage 285 Conflicts: 2-D Versus 3-D 286 What Are 4-D and 5-D? 288 Progress to 6-D 292 The National Institute of Building Sciences (NIBS) 293 Three Slightly Different Definitions of BIM 294 The National BIM Standard 294 The Real Value of BIM to Contractors and Owners 295 BIM Benefits During the Construction Phase 296

10 Contents xiii The Disadvantages of BIM 297 The Spearin Doctrine 297 Who Owns the Design Documents? 298 Insurance Questions 298 Sustainability 299 Summary Green Buildings and Sustainable Construction 319 What Is LEED? 320 How Does LEED Work? 321 Another Term You Will Hear When Dealing with Green Buildings: FSC 334 Recycling of Industrial Materials 334 Residential Housing 335 What Are the Costs and Benefits of Green Building Construction? 336 Effect on Employee Productivity 337 Risks Associated with Green Building and Risk Mitigation 338 Southern Builders v. Shaw Development 339 Long-Term Performance in Green Buildings 340 Steps a CM or PM Can Take to Reduce Liability Issues 341 Sustainability and Sustainable Design Go Hand in Hand with Going Green 342 Sustainable Design Principles 343 Expo 2000 Hanover, Germany 344 Sources for Regulations, Guidance, and Policy 344 Summary Construction Safety and Health 349 Construction's "Fatal Four" 349 The 10 Most Frequently Cited OSHA Standards Violated in OSHA Violations 350 Why Are Construction-Safety Programs Important? 351 Economic Factors in Safety 351 Worker's Compensation Costs 352 Other Costs Related to Construction Accidents 353 Indirect Costs 353 Who Are the Main Players in Construction Safety? 355

11 Xiv Contents The Owner's Contribution to Site Safety 356 The Construction Manager or Project Manager's Contribution to Site Safety 356 The Construction Supervisors' Contribution to Site Safety 357 The Craft Labor's Contribution to Site Safety 357 The Government's Contribution to Site Safety 357 Developing the Company Safety Program 358 The Statement of the Company's Safety Policy 362 The Objective of the Accident-Prevention Program 362 Coordinator 363 The Safety Director or Safety The Responsibilities of Field Supervisors and Their Relationship with the Safety Director 364 Procedures in the Field Relating to Injury and Illness Reporting 364 Working Rules and Regulations of the Safety Program 370 The Hazard-Communication Program 370 Dealing with Safety Violators 378 Drugs and Controlled Substances 380 Do Not Put Off Dealing with a Safety Violation 380 A Reward Program 381 Summary Project Communications 385 Why Do Communications Fail? 385 Communications Systems 387 Project Correspondence 387 Audiovisual Presentations 389 Establish the Objectives 389 Plan and Organize Your Material 390 Use Visual Aids 390 Flip Charts 392 Overhead Transparencies 393 Posters Millimeter Slides 394 Handling VIP Site Visits 395 Review the Status of Work and Planned Activities 395

12 Contents XV Project Reporting 396 Progress-Report Contents 399 Project Meetings 406 Establish the Need 406 Meeting-Execution Philosophy 407 A Condensed Meeting Checklist 408 Planning the Meeting 409 Organizing the Meeting 410 Controlling the Meeting 411 Postmeeting Activities 413 Be a Good Listener 414 Summary Human Factors in Construction Management 415 Qualities of a Successful Construction or Project Manager 417 Personality 417 Ethics and Integrity 418 Personal Drive 419 Physical Stamina and Mental Toughness 419 Multidiscipline Capability 419 Human Relations 421 Client-Contractor Relations 421 Subcontractor Relations 424 Contract Administration 424 Relations Among the Project Staffs 424 Internal Project Relations 425 Labor Relations 426 Public Relations 430 Leadership 430 Common Sense 433 Coolheadedness 434 Negotiating Ability 434 Patience 435 Personal Habits 436 Selling the Organization 436 Know the Business 436 Do Personal Public Relations 437 Bending the Rules (Very Carefully) 437 Summary 438 Appendix: Job Description 439 Index 447