Section 1 Flashcards
Introduction
Nature of Projects
Unique Specific/known client major investment production in "temporary" plant labour intensive mobile assets changing hazards
What are the 4 Construction Sectors?
Residential
Commercial
Industrial
Heavy/Highway
Characteristics of Residential Construction
Wood and light gauge steel Low overhead, high competition Low profit margins Close working relationship with owners strongly influenced by interest rates and economy
Characteristics of Commercial Construction
Technically complicated
Specialty contractors involved
variety of materials
Characteristics of Industrial Construction
Requires highly specialized expertise substructure construction is key heavy materials; steel and concrete schedule driven technologically complex
Characteristics of Heavy/Highway Construction
Mostly financed by public
large quantities of small materials
HD construction equipment
higher profit margins
What are the key characteristics in Construction Management?
Resource driven
Control: Time, Cost, Quality and Safety
win-win strategy
Why might CM be needed?
Increased project size
Increased complexity
increased technical complexity
government regulations
Characteristics of a typical Construction Project?
Unique
Large
Outdoors
each project has new team
What is the role of the Owner?
Establishes budget
Defines project
Selects Designer/Builder team
Determines Project Delivery Methods
Difference between Public and Private Owners?
Project funded by Federal,Prov, or City with specific guidelines vs. residential, commercial office buildings, and minimal constraints on how the project is organized and managed.
What is the role of the Owner Representative?
Defines the scope, budget and timeline
Who are design professionals?
Architects (Lead vertical) and Engineers (Lead horizontal)
What is the role of an Architect?
Translate and develops an owner’s requirements so the constructor can accurately price schedule and construct.
What is the role of an Engineer?
Lead designers
Responsible for designing all the engineered systems in commercial buildings
What is the role of the Constructors?
Responsible for the ‘means and methods’ of construction.
Who are Specialty Contractors?
also known as Subcontractors
The constructor is responsible for hiring
Who’s responsibility is it to hire Sub/Specialty Contractors?
The Constructor, ie the CM or General Contractor
Who are the Trades?
Responsible for physical construction
What are the 3 types of Organizational Structure?
Wide span of control
Departmental
Matrix
What does Wide Span Control look like?
Boss oversees all subordinates
What does Departmental Organization look like?
Department heads oversee employees and report to managing head. No communication between departments.
What does Matrix Organization look like?
Like Departmental, only with the addition of ‘gangplanks’ to link and allow communication between departments.
What are the 3 types of business ownership?
Sole Proprietorship
Partnership
Corporation
What is Sole Proprietorship?
An individual owns, manages, and provides necessary financing.
Benefits of Sole Proprietorship…
Easy to start Simplest business form No business tax Owner retains all profits Easy to dissolve
Disadvantages of Sole Proprietorship…
Limited financial capacity
Unlimited liability
vulnerable to business environment
What are the 3 types of Partnership?
General
Limited
Joint Venture
What is a General Partnership?
One or more persons co-own a business by contributing capital, equipment, and/or property.
Profits allocated based on individual share.
Benefits of General Partnerships…
Each partner is an active manager
Each partner personally for business debts and profits
Business continuity can be stipulated in agreement
Combined financial resources
Disadvantages of General Partnerships…
Each partner has unlimited liability to 3rd party
Any partner can bind into an agreement
Double taxes, income+profit
Requires strong trust
What is a Limited Partnership?
Co-owner’s liabilities and profits are limited and are equal to the amount of capital and property invested in.
Liability does not extend to personal assets.
Benefits of Limited Partnerships…
Increased opportunity to raise capital.
Limited liability
Partnership not automatically dissolved with the death of a partner.
Disadvantages of a Limited Partnership…
Limited partner provides no service to the business.
No authority in the signing of contracts.
What is a Joint Venture?
A relationship between 2 or more companies who unite to form one company for a specific undertaking.
Benefits of Joint Ventures…
Additional resources
Shared project risk
shares liability
Disadvantages of Joint Ventures…
Shared profits and losses.
limited power to control.
difficult to arrive at concensus.
What is a Corporation?
Legal entities created by binding individuals into one group under a corporate name.
Corporation is owned by its share holders.
Business controlled by a board of directors elected by share holders.
Benefits of Corporations…
Limited owner liability
Extended financial resources
Uninterrupted life of the company
Disadvantages of Corporations…
Costly to start
Double taxation of profits (Fed. and Prov.)
Strict Gov. regulations
Management may not carry the same drive for success as other forms of business ownership.
What are some sources of risk?
Project type
Site or Location
Owner organisation
Accelerated Design-Build Schedule
Who is often the greatest entity of Project Risk?
Owners
Define ‘Delivery Method’
The manner in which the project team is organised.
What are the 3 main Delivery Methods?
Design-Bid-Build
Design-Build
Construction Management
How does Design-Bid-Build work?
Owner creates a contract with a designer, who then creates all the drawings and technical papers required. At which time the designer gives all the documents to the owner and ends the contract. The owner then asks for bids and awards the contract to build to a contractor.
Advantages of Design-Bid-Build…
Single fixed price
Historical Precedence
Open competition
Active owner not required
Disadvantages of Design-Bid-Build…
Difficult to Fast Track
No constructor input
Change orders needed
How does Design-Build work?
Owner hires Design/Build company to do entire job. This company hires needed subcontractors.
Advantages of Design-Build…
Single contract
Collaboration between designer and constructor possible
Fast Tracking possible
Disadvantages of Design-Build…
Firm cost established late
no designer-constructor balance
Advantages of Pure CM…
Saves owner resources
Provides technical expertise
Competitive pricing
Disadvantages of Pure CM…
Firm cost established late
Project cost NOT Guaranteed
