SPECIALIZATION 03

CONSTRUCTION MANAGEMENT
(LECTURE 1)

I. THE NEED FOR CONSTRUCTION MANAGEMENT

THE CONSTRUCTION INDUSTRY

 largest industry in the world.
 It is more of a service than a manufacturing industry.
 Growth in this industry in fact is an indicator of the economic conditions of
a country.
 Construction industry consumes a wide employment circle of labor.
 In general, the construction industry is more challenging than other
industries due to: its unique nature; every project is one-of a kind; many
conflicting parties are involved; projects are constrained by time, money
and quality; and high risk.

THE CONSTRUCTION PROJECT

 A project is defined, whether it is in construction or not, by the following
characteristics:
- A defined goal or objective.
- Specific tasks to be performed.
- A defined beginning and end.
- Resources being consumed.

- The goal of construction project is to build something. What

differentiate the construction industry from other industries is that its
projects are large, built on-site, and generally unique. Time, money,
labor, equipment, and, materials are all examples of the kinds of
resources that are consumed by the project.

- Projects begin with a stated goal established by the owner and

accomplished by the project team. As the team begins to design,
estimate, and plan out the project, the members learn more about the
project than was known when the goal was first established. This often
leads to a redefinition of the stated project goals.

II. THE CONSTRUCTION PROJECT PHASES / PROJECT LIFE CYCLES

A. Pre-construction phase

The preconstruction phase of a project can be broken into conceptual

planning, schematic design, design development, and contract documents.

Conceptual design:
- Very important for the owner.
- During this stage the owner hires key consultants including the designer and
project manager, selects the project site, and establish a conceptual estimate,
schedule, and program.
- The owner must gather as much information as possible about the project.
- The most important decision is to proceed with the project or not.

Schematic design:
- During this phase, the project team investigates alternate design solutions,
materials and systems.
 - Completion of this stage represents about 30% of the design completion for
the project.

Design development:
- Designing the main systems and components of the project.
- Good communication between owner, designer, and construction manager is
critical during this stage because selections during this design stage affect
project appearance, construction and cost.
- This stage takes the project from 30% design to 60% design.

Contract documents:
- Final preparation of the documents necessary for the bid package such as the
drawings, specifications, general conditions, and bill of quantities.
- All documents need to be closely reviewed by the construction manager and
appropriate owner personnel to decrease conflicts, and changes.
- With the contract documents are almost complete; a detailed and complete
cost estimate for the project can be done.

B. Procurement phase (Bidding and award phase)

- The project formally transits from design into construction.

- This stage begins with a public advertisement for all interested bidders or an
invitation for specific bidders.
- In fast-track projects, this phase overlaps with the design phase.
- If the project is phased, each work package will be advertised and bid out
individually.
- It is very important stage to select highly qualified contractors. It is not wise to
select the under-bid contractors.

C. Construction phase

- The actual physical construction of the project stage.

- This stage takes the project from procurement through the final completion.
- It is the time where the bulk of the owner’s funds will be spent.
- It is the outcome of all previous stages (i.e., good preparation means smooth
construction).
- The consultant will be deployed for contract administration and construction
supervision.
- Changes during construction may hinder the progress of the project.

D. Post Construction Phase /Closeout phase

- Transition from design and construction to the actual use of the constructed
facility.
- In this stage, the management team must provide documentation, shop
drawings, as-built drawings, and operation manuals to the owner organization.
- The as-built drawings are the original contract drawings adjusted to reflect all
the changes that occurred.
- Assessment of the project team’s performance is crucial in this stage for
avoiding mistakes in the future.
- Actual activity costs and durations should be recorded and compared with that
was planned. This updated costs and durations will serve as the basis for the
estimating and scheduling of future projects.
SPECIALIZATION 03
CONSTRUCTION MANAGEMENT
(LECTURE 2)

POST CONSTRUCTION PHASE

Project Closeout

Project close-out finalizes all project activities completed across all phases of the
project to formally close the project and transfer the completed or cancelled project as
appropriate.

Closing out a construction project is a little more complicated than one might think. The
purpose of a construction project closeout is, and this should be done in a way that
makes your team look good. You need to make sure you have all of your boxes
checked and that your site is ready for your client. It’s also important to note what
worked and what didn’t during the project itself and apply it to future projects.
 
The project manager plays a crucial role in the closeout process. The project manager
needs to make sure that all elements of the project are appropriately closed. These
steps will help make sure that happens.

PURPOSE OF PROJECT CLOSEOUT

1. To assess the project,
2. Ensure Project completion,
3. Derive any lessons learned and best practices to be applied to future projects.

However, in multi-phase projects, the close-out practice may be applied at various

stages of the project; upon deliverable completion, upon phase completion, upon
iteration completion, at designated times during the project's life, or at whatever
other juncture represents a completed segment of project work. Applying the close-
out practice in this manner closes out only the portion of the project scope and
associated activities applicable to that portion of the project.

7 ACTIVITIES FOR PROJECT CLOSEOUT

1. Perform project closeout

2. Perform client closeout
3. Perform organizational closeout
4. Conduct subcontractor closeout
5. Perform final risk assessment
6. Write project final report or briefing
7. Conduct team closeout

Role of the Project Manager in Project Closeout

The project manager’s role in the closeout phase is to assure that all aspects of the
project are properly concluded. At the end of the project, team members often lose their
focus; they lose some of their discipline for showing up on time, for concentrating on the
task at hand, etc. It is the project manager’s responsibility to help the team retain its
focus during the last activities.

Each of the seven activities will produce a memo to the project manager stating the
results of the activity. The capstone output of this phase is the project final report,
written by the project manager, which summaries the results of the seven activities.

Problems During the Closeout Phase

A number of things can go wrong during project closeout:

1. The team failed to plan out the closeout phase and is attempting to plan
and execute the closeout at the same time. The resources of people, money and
time have not been planned so it is a haphazard effort at best with key closeout
activities being missed or truncated. The solution is to plan the closeout activities at
the same time the rest of the WBS is developed. Include the closeout work packages
(activities) in the budget, schedule, WBS, etc. Include the closeout activities in the
resource plan so each team members knows his or her responsibilities during
closeout.
2. Team members start to leave the team before the closeout phase is
completed because they do not understand all that has to be done and their
roles in the closeout. The project manager should tell the team early in the project
that the closeout phase consists of activities that include all team members. The
project manager should build a sense of team cohesion so individual members don’t
consider leaving the team early.
3. Functional managers start to withdraw their team members before the
closeout is complete. In the interim briefing to upper management, the project
manager should indicate that the project closeout consists of a number of important
closeout activities which will require the full team to perform — with the request that
functional managers not take team members back until released by the project
manager.
4. The team surfaces a number of unresolved issues, or uncompleted work
packages or unacceptable deliverables. This means the project is not finished.
The project manager will have to remain on the team (perhaps with a small staff)
after the team disbands to resolve the problems. One preventive solution: the project
manager communicates frequently with the customer especially when it is time to get
the customer’s approval (in writing if possible) of work performed, deliverables
submitted or problems resolved. Don’t wait until the end of the project to resolve
issues in the hope that they will have gone away by then. A memo for record is a
good way to document that something happened. If it is inappropriate to ask a
customer or stakeholder or upper manager to sign a document, use the memo for
record. In the absence of a negative response from the upper manager, we conclude
the action, deliverable, etc is acceptable. A statement of the following kind might help
clarify this: “In the absence of any feedback within the next 10 business day, we will
conclude that this action, deliverable, etc is acceptable.”
SPECIALIZATION 03
CONSTRUCTION MANAGEMENT
(LECTURE 3)

7 ACTIVITIES FOR PROJECT CLOSEOUT

Activity 1: Perform Project Closeout

This work package has as its purpose to determine that all the requirements have been
satisfied. Assign one or two team members to perform the following subtasks of this
work package:
1. Validate and document that all the work packages listed on the WBS have been
completed. If any work package is not complete for some legitimate reason,
document the reason.
2. Review the business case definition and charter to assure and document that all
requirements on these documents have been completed or resolved.
3. Review the contract, if there is one, to determine that all requirements have been
met.
4. Conduct the final project evaluation. Each subtask should conclude with a memo
to the project manager indicating the findings and conclusions. Memos should be
short, simple and direct.

Activity 2: Perform Client Closeout

The purposes of the client closeout are to:

1. Assure that the client has accepted the deliverables
2. Measure the degree to which the client is satisfied.

Subtask (a) requires someone to interview the client and determine that all deliverables
have been received and accepted. A memo to the project manager is how this subtask
is documented. Subtask (b) is greatly facilitated by using a customer satisfaction. The
question of whom to survey is important. Get survey information from all the important
stakeholders in the customer organization.

The output of this work package is a memo to the project manager indicating the results
of each subtask.
Activity 3: Perform Organizational Closeout

The aim of this work package is to conclude the team’s use of organizational resources
and to make a final resolution of the remaining resources. Select a team member to
complete the four subtasks in this work package:
1.
1. The first subtask requires the writing of a memo to the facilities
management office stating that the project room will be vacated on a certain date.
 A copy of this memo is sent to the project manager along with the report on the
entire work package.
2. Releasing all borrowed or rented equipment is the second subtask. (The
team member will write a memo to the technical support office if the equipment
had been borrowed from that office or a letter or telephone call followed up by a
letter to the rental company from whom the equipment was rented.) The memo or
letter will need to include an inventory of equipment being returned. This subtask
includes reconciling any differences between the original inventory and the return
equipment inventory. A copy of the closure memo will be provided to the project
manager.
3. Finalizing financial records and funds is the third subtask in this work
package.  The person doing this subtask will reconcile the original project budget
against monies spent and outstanding invoices and expected incoming invoices
plus the balance that will remain after all invoices are paid. The process and
documentation must be acceptable to the finance department; the financial
records are not reconciled until the finance department concurs.
4. Preparing memos of appreciation to functional managers and other
stakeholders is a subtask of this work package. In each memo, try to identify a
unique contribution or help the team received for which the team is grateful. Write
a memo to the project manager stating the results of Activity 3.

Activity 4: Conduct Subcontractor Closeout

The purpose of this work package is to reconcile all subcontractor matters. The three
subtasks are:
1.
1.
1. Determine that the subcontractors have completed all the work
for which they are responsible. Include the results of this investigation in the
memo to the project manager.
2. Reconcile the amount of monies due the
subcontractors. Coordinate with the procurement department on this. Include
the results of this reconciliation in the memo to the project manager.
3. Prepare subcontractor letters of appreciation for each firm
which performed well. Write the letters for the project manager’s signature
and send a copy to the Procurement Department.

Write a memo to the project manager stating the results of this activity.
Activity 5: Perform Final Risk Assessment

The purpose of this work package is to identify any threats or opportunities that are
relevant to the end of the project. This work package will require a small group of people
to perform the following risk assessment activities:

 Identify risks
 Estimate probability and impact
 Stratify risks
 Develop strategies

The following ten categories of risks should be investigated and discussed:

1. Residual risks
2. Deliverable transference
 3. Improper operation
4. Training
5. Maintenance
6. Fielding
7. Cash flow
8. Organizational politics
9. Constituency acceptance
10. Legal risks
Use a small group generating process from Activity 2 to identify threats and
opportunities under each of the ten categories. This work package requires a Final Risk
Assessment Report, which is presented to the project manager for discussion and
dissemination. The report consists of the documents listed above plus a cover memo
summarizing the findings.

Activity 6: Write the Project Final Report

The final report summarizes all the closeout activities. Its purposes are to:

1. Demonstrate to upper management that the project is indeed

complete
2. Present the final status of the project

The report will include the following topics:

 Project Closeout Activities

 Client Closeout Activities
 Organizational Closeout Activities
 Subcontractor Closeout Activities
 Final Risk Assessment
 Team Closeout Activities
 The report closing statement

The person writing the report has the closeout memos for the activities.
Activity 7: Conduct Team Closeout

This work package contains five tasks:

1.
1. Conduct the final lessons learned session. A lesson learned is a piece
of experience that may be used to improve performance or repeat good
performance. Something that the team did that worked should be retained as a
lesson learned because the next time the team is faced with a similar problem, it
will want to use the action that was successful in the past. Something we did that
did not “work out” or something we did not do that caused a subsequent problem
need to be retained as lessons learned.Do not wait till the end of the project to
conduct the lessons learned session. If you do so, many lessons will have been
forgotten and the information will not be available to help on the current project
because the present project is concluding. A better strategy is to conduct this
session after the team has been together for about a month. Instead of asking
“What went well?” ask “What is going well?”Use the lessons learned session every
two or three months to get a sense of the team’s morale, gather lessons learned
 and to shape behavior. The result of these sessions will be to highlight desired
behavior, reward desired behavior and clarify desired behavior. Rewarding
behavior increases the probability of getting the same behavior again. The net
result is that the team becomes more cohesive and committed to the project.
2. Write letters of appreciation for team members. It is the project
manager’s responsibility to write letters of appreciation for high-performing team
members. Some organizations allow the team leader to submit the
recommendation for a cash award.
3. Write letters of appreciation for functional managers. This task is
politically motivated. Writing letters of appreciation to functional managers who
have lent their people to your project is rewarding them for doing so. When you
reward behavior, you increase the probability of getting that behavior again in a
similar situation. The letter of appreciation will have a positive effect the next time
you need to borrow a person from a functional manager.
4. Release the team members. The project manager may release the team
verbally but another way is to include the release date in the letter of appreciation
for the team member. Give each team member a copy at the team party and send
a copy to the team member’s supervisor.
5. Celebrate. Every project should conclude with a party. The cost, time,
activities and place must be acceptable and within the norms of the organization.
A catered lunch is one way. Pizza and beer at a local restaurant is another. The
project manager should pay if the organization will not pay for the celebration.
Paying for a few pizzas and beers will not cause any lasting damage to the project
manager’s financial status and it shows class!

SPP 201-SPP 205

SPP22 CLEARING, PAYEMNT SCHED,

SPP206

SPP 208- METHOD OF COMPENSATION

-CONTRUCTION METHOD.10 PERCENT

-PROFESSIONL FEE AND EXPENSES

PCC, MDEE

LUMPSUM/FIXED FEE