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Construction Practices

1.1 Introduction

The objective of this book is to present and discuss the management of field construction projects. These projects involve a great deal of time and expense, so close management control is required if they are to be completed within the established time and cost constraints. The text also develops and discusses management techniques directed toward the control of cost, time, resources, and project finance during the construction process. Emphasis is placed on practical and applied procedures of proven efficacy. Examples relate to field construction practices.

Effective management of a project also requires a considerable background of general knowledge about the construction industry. The purpose of this chapter is to familiarize the reader with certain fundamentals of construction practice that will be useful for a complete understanding of the discussions presented in later chapters. Learning objectives for this chapter include:

• Recognize the size and impact of the construction industry.
• Understand how a construction project moves from concept to reality.
• Identify entities involved in a construction project and various project delivery systems that link the participating entities.
• Introduce the role of the project manager.

1.2 The Construction Industry

In terms of the dollar value of output produced, the construction industry is one of the largest single production activities of the US economy. As of December of 2013, the seasonally adjusted value of construction put in place for 2013 was estimated to be $0.930 trillion. This figure is updated monthly by the US Census Bureau. The current value can be found on the US Census Bureau website under Construction Spending, www.census.gov/construction/c30/c30index.html. The current dollar gross domestic product (GDP) in the fourth quarter of 2013 was $17.103 trillion. This figure is regularly updated by the US Department of Commerce, Bureau of Economic Analysis, and can be found at www.bea.gov/newsreleases/ national/gdp/gdpnewsrelease.htm.

Though construction was severely impacted by the economic downturn at the end of the first decade of this century, the annual expenditure for construction still accounts for almost 5.44 percent of the GDP. More than 1 of every 20 dollars spent for goods and services in the United States is spent on construction. The construction industry is also one of the nation's largest employers, so its impact in terms of both dollars and jobs remains considerable.

Not only does the construction industry touch the lives of virtually every human being on a daily basis; it also occupies a fundamental position in many national economies. This large and pervasive industry is regarded as the bellwether of economic growth in the United States. Periods of national prosperity usually are associated with high levels of construction activity. One is the natural result of the other.

The construction industry is heterogeneous and enormously complex. There are several major classifications of construction that differ markedly from one another: housing, nonresidential building, heavy civil, utility, and industrial. In addition, these construction types are further divided into many specialties, such as electrical, concrete, excavation, piping, and roofing.

Construction work is accomplished by contractors who vary widely in terms of size and specialty. Some contractors choose to concentrate on a particular task or aspect of the construction project and are therefore referred to as specialty contractors. Others assume broader responsibility for a comprehensive work package and are referred to as general contractors. Commonly, general contractors will subcontract specific aspects of a project to specialty contractors, forming a contractual web of general contractors and specialty contractors. Within the industry, very large contractors handle annual volumes in excess of $15 billion; their annual budgets rival the gross national products of many small countries. However, the construction industry is typified by small businesses.

1.3 The Construction Project

Construction projects are intricate, time-consuming undertakings. The total development of a project normally consists of several phases requiring a diverse range of specialized services. In progressing from initial planning to project completion, the typical job passes through successive and distinct stages that demand input from such disparate areas as financial organizations, governmental agencies, engineers, architects, lawyers, insurance and surety companies, contractors, material and equipment manufacturers and suppliers, and construction craft workers.

During the construction process itself, even a project of modest proportions involves many skills, materials, and literally hundreds of different operations. The assembly process must follow a natural order of events that constitutes a complicated pattern of individual time requirements and restrictive sequential relationships among the project's many segments.

To a great extent, each construction project is unique-no two jobs are ever exactly the same. In its specifics, each structure is tailored to suit its environment, arranged to perform its own particular function, and designed to reflect personal tastes and preferences. The vagaries of the construction site and the possibilities for creative and utilitarian variation of even the most standardized building product combine to make each construction project a new and different experience. The contractor sets up its "factory" on the site and, to a large extent, custom builds each structure.

Construction is subject to the influence of highly variable and sometimes unpredictable factors. The construction team, which includes architects, engineers, craft workers, specialty contractors, material suppliers, and others, changes from one job to the next. All the complexities inherent in different construction sites-such as subsoil conditions, surface topography, weather, transportation, material supply, utilities and services, local specialty contractors, labor conditions, and available technologies-are an innate part of construction.

However, though construction projects are subject to infinite variety, construction processes tend to be consistent from job to job. Each job goes through mobilization and closeout processes. All materials and installed equipment are subject to a procurement process that includes submittals, approvals, purchase, and shipment to the job site. Contracts are negotiated. Costs are estimated and billed out when a component is completed. Changes happen regularly, but even changes are handled through a consistent change order process. Hence, much of the current focus in construction management is on understanding and managing construction processes more effectively.

The character of construction projects, typified by their complexity and diversity and by the nonstandardized nature of their production, is a result of variable inputs operated on by standard processes yielding a unique product. The use of prefabricated modular units is somewhat limiting this variability, but it is unlikely that field construction will ever be able to adapt completely to the standardized methods and product uniformity of assembly-line production. To the contrary, many manufacturing processes are moving toward mass customization, or "one-off" production and adopting many of the project management tools originating in the construction industry.

1.4 Project Stages

A construction project proceeds in a rather definite order; the stages of development that follow are typical.

A. Planning and Definition

Once an owner has identified the need for a new facility, he or she must define the requirements and delineate the budgetary constraints. Project definition involves establishing broad project characteristics, such as location, performance criteria, size, configuration, layout, equipment, services, and other owner requirements needed to establish the general aspects of the project. Conceptual planning stops short of detailed design, although a considerable amount of preliminary architectural or engineering work may be required. The definition of the work is basically the responsibility of the owner, although a design professional may be called in to provide technical assistance and advice.

B. Design

The design phase involves the architectural and engineering design of the entire project. It culminates in the preparation of final working drawings and specifications for the total construction program. In practice, design, procurement, and construction often overlap, with procurement and construction beginning on certain segments as soon as the design is completed and drawings and specifications become available for those segments.

With the advent of high-speed computing and massive data management capabilities, the various design components can now be incorporated into a single database producing integrated design in a digital format. Production information is being added to the database, resulting in a Building Information Modeling (BIM) model of the project that contains all information on the project in a unique digital format. The use of BIM is still in the early stages, but its use is evolving rapidly throughout the construction industry.

C. Procurement and Construction

Procurement refers to the ordering, expediting, and delivering of key project equipment and materials, especially...