FUNDAMENTALS OF CONSTRUCTION PROJECT MANAGEMENT satisfaction and is an integral part of project management as illustrated in

Figure 1.1.
1.1 INTRODUCTION

Construction and the ability to build things is one of the most ancient of
human skills.

In contrast to other manufacturing industries that fabricate large numbers

of units, such as automobiles or television sets, the construction industry is
generally focused on the production of a single and unique end product.
That is, the product of the construction industry is a facility that is usually
unique in design and method of fabrication.

Once a project has been defined, one of the most critical questions facing Figure 1.1 is shown as an equilateral triangle to represent an important
the construction manager is ‘‘What construction technique or method principle of project management: a balance is necessary between the scope,
should be selected?’’ The types of methods for placing construction are budget, and schedule.
diverse. New methods are continuously being perfected and a construction For any given project there is a certain amount of work that must be
manager must weigh the advantages and disadvantages of a given method performed and an associated cost and schedule for producing the work.
or technique.
Any adjustment in budget and/or schedule requires a corresponding
adjustment in scope.
DEFINITION OF PROJECT
This simple concept of a balance between scope, budget, and schedule is
• an endeavor that is undertaken to produce the results that are sometimes not fully recognized during early project development as well as
expected from the requesting party during design and construction.

• may be design only, construction only, or a combination of design WHY??? The source of many problems associated with a project is failure to
and construction properly de- fine the project scope. Too often the focus is just on budget or
schedule. Not only should the scope, budget, and schedule be well defined,
• consists of three components: scope, budget, and schedule but each must be linked together since one affects the other, both
individually and collectively.
When a project is first assigned to a project manager, it is important that all
three of these components be clearly defined. Throughout this book, the • The manager must be clever and innovative in the utilization of
term Scope represents the work to be accomplished, i.e., the quantity and resources available. Somewhat like a general in battle, the manager
quality of work. Budget refers to costs, measured in dollars and/or labor- must develop a plan of action and then direct and control forces
hours of work. Schedule refers to the logical sequencing and timing of the (resources) in a coordinated and timely fashion so that the
work to be performed. The quality of a project must meet the owner's objective is achieved.
Since the project scope defines the work to be accomplished, it should be MANAGEMENT CONCEPTS
the first task in the development of a project, prior to the development of
either the budget or the schedule. Too often, top management specifies a
project budget or schedule and then asks the project team to define a scope
to match the budget. This is the reverse order of defining a project and is
not a good project management practice. 'It is the duty of a project manager
to ensure that the project scope, budget, and schedule are linked together.

MANAGEMENT CONCEPTS AND LEVELS OF ORGANIZATION IN

Systematic management is an approach to management that focuses on
CONSTRUCTION
the management process rather than on the final outcome. The goals to this
At its most fundamental level, construction project management handles approach to management were:
the planning, coordination, and execution of a construction project,
• To create specific processes and procedures to be used in job task
whether it’s agricultural, residential, commercial, institutional, industrial,
completion
heavy civil, or environmental. Construction project management typically
includes complicated tasks that can shift wildly, depending on the work at • To ensure that organizational operations were economical
hand, and it requires strong skills in communication, deep knowledge of the
building process, and the ability to problem-solve. Construction project • To ensure that staffing was adequate for the needs of the
management is a complex field, requiring knowledge in many different areas organization
like finance, mediation, law, business, and more.
• To maintain suitable inventory so that the demands of consumers
could be met

THE ROLE OF A PROJECT MANAGER IN CONSTRUCTION MANAGEMENT • To establish organizational controls

Construction project managers shoulder the responsibility of keeping the This type of management approach was the first to directly link orderly
project moving according to plan. The goal is to manage the project so that operations, human resource management, and communication to
it finishes on schedule and within budget, while still meeting building codes, organizational success.
plans, and specs.
The scientific management approach developed by Taylor is based on the
concept of planning of work to achieve efficiency, standardization,
specialization, and simplification. Acknowledging that the approach to
increased productivity was through mutual trust between management and
workers, Taylor suggested that, to increase this level of trust, the advantages
of productivity improvement should go to workers, physical stress and
anxiety should be eliminated as much as possible, capabilities of workers
should be developed through training, and the traditional ‘boss’ concept MANAGEMENT LEVELS OF CONSTRUCTION
should be eliminated.
Organizational considerations lead to a number of hierarchical levels that
Taylor developed the following four principles of scientific management for can be identified in construction. This derives from the project format.
improving productivity: Decision making at levels above the project relate to company management
considerations. Decisions within the project relate to operational
• Science, not rule-of-thumb. Old rules-of-thumb should be considerations (e.g., selection of production methods) as well as the
supplanted by a scientific approach to each element of a person’s application of resources to the various construction production processes
work. and work tasks selected to realize the constructed facility. Specifically, four
• Scientific selection of the worker. Organizational members should levels of hierarchy can be identified as follows:
be selected based on some analysis, and then trained, taught and Organizational. The organizational level is concerned with the legal and
developed. business structure of a firm, the various functional areas of management,
• Management and labour cooperation rather than and the interaction between head office and field managers performing
conflict. Management should collaborate with all organizational these management functions.
members so that all work can be done in conformity with the Project. Project-level vocabulary is dominated by terms relating to the
scientific principles developed. breakdown of the project for the purpose of time and cost control (e.g., the
• Scientific training of the worker. Workers should be trained by project activity and the project cost account). Also, the concept of resources
experts, using scientific methods. is defined and related to the activity as either an added descriptive attribute
of the activity or for resource scheduling purposes.
Humanistic management is an approach to management theory based on
the idea of human needs and human values. Employees are seen not merely Operation (and Process). The construction operation and process level is
concerned with the technology and details of how construction is
as economic assets valued primarily for their productivity but as people with
complex needs and a desire for meaningful and varied daily tasks. performed. It focuses on work at the field level. Usually, a construction
operation is so complex that it encompasses several distinct processes, each
Humanistic management is a people-oriented management that seeks having its own technology and work task sequences. However, for simple
profits for human ends. It contrasts with other types of management that situations involving a single process, the terms are synonymous.
are essentially oriented toward profits, with people seen as mere resources
to serve this goal. Task. The task level is concerned with the identification and assignment of
elemental portions of work to field units and work crews.
 As the name implies, construction technology relates to the methods or
techniques used to place the physical materials and elements of
construction at the job site. In contrast to construction technology,
construction management addresses how the resources available to the
manager can be best applied. Typically, when speaking of resources for
construction, we think of the FIRST four M’s of construction: manpower,
machines, materials, and money. Management involves the timely and
efficient application of the four M’s to construct a project. The types of
methods for placing construction are diverse. New methods are
continuously being perfected and a construction manager must weigh the
advantages and disadvantages of a given method or technique. Hence, the
5th M is the method.

STRUCTURE OF ORGANIZATION

The focus of construction management is the planning and control of

resources within the framework of a project.

The study of construction as a discipline can be broadly structured into two

general themes:

1. Construction technology
2. Construction management
1.2 PROJECT MANAGEMENT CONCEPT Designer

RESPONSIBILITIES OF PARTIES • producing design alternatives, computations, drawings, and

specifications that meet the needs of the owner
Each of the three principal parties in a project has a role to fulfill in the
• designers usually prepare an estimate of the probable construction
various phases of design development and construction. A team approach
cost for the design they have prepared
between the owner, designer, and contractor must be created with a
cooperative relationship to complete the project in the most efficient Contractor
manner. Too often an adverse relationship develops that does not serve the
best interest of anyone. • responsible for the performance of all work in accordance with the
contract documents that have been prepared by the designer. This
Quality is the responsibility of all participants in a project, including all levels includes furnishing all labor, equipment, material, and know-how
of management and workers in each of the principal parties. An attitude of necessary to build the project
achieving quality must be instilled in everyone and perpetuate throughout • must prepare an accurate estimate of the project, develop a
the work environment. The attitude should not be "what can we do to pass realistic construction schedule, and establish an effective project
quality control or final inspection? Instead, it should be "what can we do to control system for cost, schedule, and quality
improve our work and what is the best way we can furnish a project that
meets the needs and satisfaction of the owner?"
PROJECT TEAMS

Technically speaking, project management may be defined as the art and

science of coordinating people, equipment, materials, money. and
schedules to complete a specified project on time and within approved cost.

The project manager is provided with resources such as labor, equipment,

and materials and is expected to build a facility that meets the specifications
and is consistent with the drawings provided for the project. Much of the
work of a project manager is organizing and working with people to identify
Owner problems and determine solutions to problems. In addition to being
organized and a problem solver, a manager must also work well with people.
• Responsible for setting the operational criteria for the completed It is people who have the ability to create ideas, identify and solve problems,
project communicate, and get the work done. Because of this, people are the most
• NEED TO identify their level of involvement in the project, e.g., the important resource of the project manager. Thus, the project manager must
review process, required reports, and the levels of approval. develop a good working relationship with people in order to benefit from
the best of their abilities.
responsible for setting parameters on total cost, payment of costs, major
milestones, and the project completion date
 When managing multiple small projects, the project manager is usually
required to share team members with other project managers. Generally,
the project duration is short with minimal contact between the project
manager and team members. Only minimal staffs can be afforded on small
projects, thus, few individuals assigned must take responsibility for multiple
functions. Although managing multiple small projects may not have the
formality of man- aging a single large project, the principles of working with
people in the spirit of cooperation and teamwork still applies.

It is the duty of a project manager to organize a project team of people and

coordinate their efforts in a common direction to bring a project to
successful completion. Throughout the project management process there
are four questions that must be addressed: Who? Does what? When? and
How much?

Project teams must be assembled to accomplish the work necessary to

complete engineering and construction projects. Team members are vital to
the success of the project. The project manager must make sure that his or
her team understands and is focused on the desired out- come of the
project. The project manager also acts as a facilitator in project
communications for conflict resolution and team performance. For a
successful project, the project manager must build and lead an effective
project team. Working with wide projects involved managing several teams. Although
each of these teams have their own objectives, the diverse expertise that
each possesses must converge into an overlapping environment. Although
each team performs a different function, each team must develop an
attitude of shared ownership in the project. Regardless of the size and
number of teams, there must be a single head project manager to make final
decisions and keep focus on the project.
KEY CONCEPTS OF PROJECT MANAGEMENT 13. Emphasize that quality is a must, because if it doesn't work
it is worthless, regardless of cost or how fast it is
Although each project is unique, there are key concepts that a project
completed
manager can use to coordinate and guide a project to completion.
14. Budget all tasks; any work worth doing should have
1. Ensure that one person, and only one person, is
compensation
responsible for the project scope, budget, and schedule
15. Develop a project schedule that provides logical
2. Don't begin work without a signed contract, regardless of
sequencing of the work required to complete the job
the pressure to start
16. Establish a control system that will anticipate and report
3. Confirm that there is an approved scope, budget, and
deviations on a timely basis so corrective actions can be
schedule for the project
taken
4. Lock in the project scope at the beginning and ensure
17. Get problems out in the open with all persons involved so
there is no scope growth without approval
they can be resolved
5. Make certain that scope is understood by all parties,
18. Document all work, because what may seem irrelevant at
including the owner
one point in time may later be very significant
6. Determine who developed the budget and schedule, and
19. Prepare a formal agreement with appropriate parties
when they were prepared
whenever there is a charge in the project
7. Verify that the budget and schedule are linked to the
20. Keep the client informed; they pay for everything and will
scope
use the project upon completion
8. Organize the project around the work to be performed,
rather than trying to keep people busy

9. Ensure there is an explicit operational work plan to guide

the entire project

10. Establish a work breakdown structure that divides the

project into definable and measurable units of work

11. Establish a project organizational chart that shows

authority and responsibilities for all team members

12. Build the project staff into an effective team that works
together as a unit
1.3 CONTRACTS AND SPECIFICATIONS o The definition of the scope, i.e. what exactly has to be
done, and what happens if the changes are required or
WHAT IS CONTRACT MANAGEMENT?
desired along the way;
Contract Management could be defined as a multi-stage process that goes
o When the works have to be concluded and what happens
on through the entire duration of the contract and ensures that the parties
if they are concluded on time;
meet their contractual obligations in order to deliver the specific objectives
provided in the contract. o When payments are due and what happens if they are not
paid on time;
From a legal point of view, contract is A mutual agreement between two or
more parties that something shall be done, an agreement enforceable at o Technical specifications and quality and performance
law. requirements and what happens if the agreed standards
are not met
According to Fédération Internationale Des Ingénieurs – Conseils (from
French, the International Federation of Consulting Engineers) or FIDIC, A
contract means the General Conditions, the Supplementary Conditions, the
TYPES OF CONSTRUCTION CONTRACT
Specifications, the Drawings, the Bill of Quantities, the Tender, the Letter of
Acceptance and the Contract Agreement.

When any construction or real estate project is concerned, contracts are an

important part of the process. A construction contract provides important
protections for the parties to the contract and for both contractors and
homeowners or the owners of the project or building if the project is a
commercial construction project.

The most important aspects of a construction contract – and from where

most of disputes arise are:
Construction contract types are usually defined by the way, the Cost plus contracts are used when the scope has not been clearly defined
disbursement is going to be made and details other specific terms, like and it is the owner responsibility to establish some limits on how much the
duration, quality, specifications, and several other items. These major contractor will be billing. When some of the aforementioned options are
contract types can have many variations and can be customized to meet the used, those incentives will serve to protect the owner's interest and avoid
specific needs of the product or the project. being charged for unnecessary changes. Be aware that cost-plus contracts
are difficult or harder to track and more supervision will be needed,
Lump Sum or Fixed Price Contract Type
normally do not put a lot of risk in the contractor.
This type of contract involves a total fixed priced for all construction-related
Time and Material Contracts (When Scope is Not Clear)
activities. Lump sum contracts can include incentives or benefits for early
termination, or can also have penalties, called liquidated damages, for a late Time and material contracts are usually preferred if the project scope is not
termination. Lump Sum contracts are preferred when a clear scope and a clear, or has not been defined. The owner and the contractor must establish
defined schedule has been reviewed and agreed upon. an agreed hourly or daily rate, including additional expenses that could arise
in the construction process.
This contract shall be used when the risk needs to be transferred to the
builder and the owner wants to avoid change orders for unspecified work. The costs must be classified as direct, indirect, markup, and overhead and
However, a contractor must also include some percentage cost associated should be included in the contract. Sometimes the owner might want to
with carrying that risk. These costs will be hidden in the fixed price. On a establish a cap or specific project duration to the contractor that must be
lump sum contract, it is harder to get credit back for work not completed, met, in order to have the owner’s risk minimized. These contracts are useful
so consider that when analyzing your options. for small scopes or when you can make a realistic guess on how long it will
take to complete the scope.
Cost Plus Contracts
Unit Pricing Contracts
This type of contract involves payment of the actual costs, purchases or
other expenses generated directly from the construction activity. Cost Plus Unit pricing contracts is probably another type of contract commonly used
contracts must contain specific information about a certain pre-negotiated by builders and in federal agencies. Unit prices can also be set during the
amount (some percentage of the material and labor cost) covering bidding process as the owner requests specific quantities and pricing for
contractor's overhead and profit. Costs must be detailed and should be a pre-determined amount of unitized items.
classified as direct or indirect costs. There are multiple variations of Cost
By providing unit prices, the owner can easily verify that he's being charged
Plus contracts and the most common are:
with un-inflated prices for goods or services being acquired. Unit price can
o Cost Plus Fixed Percentage easily be adjusted up and/or down during scope changes, making it easier
for the owner and the builder to reach into agreements during change
o Cost Plus Fixed Fee
orders
o Cost Plus with Guaranteed Maximum Price Contract

o Cost Plus with Guaranteed Maximum Price and Bonus

Contract
CONDITIONS AND SPECIFICATIONS OF CONTRACTS EXECUTIVE FUNCTIONS OF A MANAGER- PLANNING

Contract conditions, usually included in the book of specifications (or in the 2.1 INTRODUCTION
accompanying architectural drawings) of a contract, that set the minimum
Construction project management requires a broad variety of skills, along
performance requirements for the contractor. These conditions also include
with the ability to interface with a diverse range of agencies and people in
the rights and responsibilities of the parties involved
order to lead the project from concept to build. It’s important that
Contract conditions set out the principal legal relationship between the construction project managers follow the principles of project management
parties to a construction project, determining the allocation of risk and during every phase of the project.
consequently, price.
CONCEIVING AND INITIATING THE PROJECT
Specifications is the part of the Contract that consists of written
You can’t start a project unless you know you’ll be able to finish it. First
requirements for materials, equipment, systems, standards, and
comes the due diligence to determine if the project is even feasible. How do
workmanship as applied to the Work, and certain administrative
you figure this out? You want to go through a feasibility study or what is
requirements and procedural matters applicable to the Work.
often called a business case, in which you look at the goals, cost and timeline
to see if you have resources to reach a successful project end within those
constraints. You also want to define the reasoning behind the project and
make sure it’s sound. If so, then you create your project charter to help
initiate the project. You’ll also identify potential issues and risks in this
phase.

DEFINE AND PLAN THE PROJECT

You have approval, now how are you going to achieve success? Outline the
tasks within the timeline, noting project milestones, and the resources
needed to do those tasks within the budget allotted. Be transparent in your
plan, so everyone is on the same page and understands what needs to be
done over the life cycle of the project. That includes detailing the cost,
scope, duration, quality and communications used in the project. This is also
when you’ll be able to conceptualize the best team for the project and begin
the process of assembling them.

LAUNCH THE PROJECT

Now you’re executing the project, taking the plan and implementing it,
along with all the changes and issues that can arise during such a process.
Whatever deliverables you promised must come through in the timeframe 2.2 PROJECT INIATION
you noted. Now you must deal with stakeholders and customers and teams.
Planning is the formulation of a course of action to guide a project to
The latter have tasks must be completed, which means workload
completion. It starts at the beginning of a project, with the scope of work,
management and resource allocation. You’ll be setting up meetings and
and continues throughout the life of a project. The establishment of
reporting frequently throughout this stage. This is where your project
milestones and consideration of possible constraints are major parts of
management tool will really be tested, but more on that later.
planning. Successful project planning is best.
TRACK PROJECT PERFORMANCE
accomplished by the participation of all parties involved in a project. There
You can’t know the progress of your project if you don’t have a way to must be an explicit operational plan to guide the entire project throughout
monitor it. You’ll be doing this during the previous stages of the project, but its life.
it’s important enough to demand its own separate stage in your
Since the construction sector is so diverse, it is helpful to look at the major
management. You’ll want to have a way to note the progress, which is why
types of projects typical of construction to understand the structure of the
you need to set up key performance indicators for cost, time and quality. If
industry. Construction projects can be broadly classified as (a) building
you can stay on top of these figures, it’s less likely you’ll manage a failing
construction, (b) infrastructure construction, and (c) industrial construction,
project. Therefore, stay flexible and communicative throughout so you can
depending on whether they are associated with housing, public works, or
adapt quickly to change when it occurs, and it always occurs.
manufacturing processes.
Management is often summarized into four basic functions: planning,
organizing, directing, and controlling. Although these basic management
functions have been developed and used by managers of businesses, they
apply equally to the management of a project.
CONTRACT ARRANGEMENTS of construction, and has sufficient time to permit the design to be fully
completed before construction bids are obtained. This method is often used
There are different procurement systems and several ways of classifying
for very large, complex projects. Since the design is fully developed, an
them. On the basis of how the interaction between design and construction,
“apples to apples” comparison of multiple bids can be made.
how funding and operations are managed, mode of reimbursement of the
contractor, level of information available or required before a construction The primary disadvantage of the Design/Bid/Build process is the Architect’s
contract, and the magnitude of risk taken by participating parties. To deliver limited ability to establish an accurate cost estimate; consequently, the
a quality construction project on time and on budget, you must successfully Owner may not know the cost of his project until the bids are received. If
coordinate the efforts of the Owner, Architect and General Contractor in an the bids are higher than the budget, costly redesign is often required. Other
accepted and appropriate contract form. There are three basic project disadvantages include:
delivery methods: Design/Bid/Build, Construction Management, and
o Owner is responsible for the completeness and accuracy
Design/Build. Each method has its own advantages and disadvantages, and
of the Architect drawings
some methods are better suited for certain kinds of projects than others.
o Contractor has no input regarding more cost-efficient
materials or construction methods

o Adversarial relationships can occur between the Architect

and the Contractor

o Contractor is forced to use the least cost approach to be

low bidder

Design/Build

In the Design/Build method, the Owner contracts with a single entity to

Design, Bid, Build provide both the design and construction of the building. The intent of the
This method usually starts with the Owner selecting and entering into a Design/Build form of construction is to foster teamwork between the
contract with an Architect or other design professional. The Architect fully Architect and the Contractor early in the project and facilitate early
develops the design and creates “bid documents” that are then made budgeting, programming, and financing. It also promotes review of the
available to general contractors for competitive bids. The bid process can design as it proceeds for constructability and cost of construction. Well-
either be an open bid or by invitation. Once a suitable Contractor is selected, suited for fast-track construction, design/build projects are often more cost-
the Owner and Contractor execute a separate contract to build. The effective and less susceptible to delays in the work than traditional projects.
Contractor, in turn, engages subcontractors and suppliers to perform the Perhaps the greatest advantage for the Owner is that the Owner only has to
work. look to one party for the design and the construction. If a problem arises,
The Design/Bid/Build approach is best when the Owner wishes to be actively the Design/Builder is responsible, whether it is a design or construction
involved in the design process, requires a fixed cost before commencement issue. Because the Architect and the Contractor are on the same team, many
Owners observe a reduction in disputes, and insurance companies have Often, the Construction Manager is also the Contractor. Other advantages
noted a reduction in claims with Design/Build projects. include:

The two primary disadvantages to the Design/Build method are: o Owner is provided advice on budget, schedule, and
constructability during design phase
• The Owner does not receive the benefit of the system of “checks
and balances” that exist when it contracts separately with an o CMAR can provide value-engineering advice to save client
Architect and a Contractor time and money
• It is difficult for the Owner to verify that the best price has been
o CMAR is responsible for schedule and budget
achieved for the work
o CMAR typically provides a Guaranteed Maximum Price
(GMP)

o Owner knows the Contractor’s profit on the project and

any change orders

o Construction can begin without the design being fully

completed

Disadvantages:

o This method requires a high level of communication

between the Owner and the CMAR

o Requires cooperation of the Architect to work out details

Construction Management of design before or during construction

One variation of the Design/Bid/Build method is to secure the services of a o Construction costs may run over if design mistakes are not
Construction Manager. A Construction Manager At-Risk may be used detected early
instead of bidding the project to General Contractors. An Agency
o Involves negotiation of two separate contracts and
Construction Manager acts as an advisor to the client. It is important to
requires careful contract language establishing
understand the “risk shift” inherent in these two Construction Management
responsibilities of each party
methods.
The delivery method referred to as Construction Manager – Agency or CM
The most common form of Construction Management is CM At-Risk, where
(Agency) is a fee-based service in which the CM (Agency) acts as the Owner’s
an independent professional reduces the risk to the Owner because a
representative during each stage of the project. The CM (Agency) is the
Construction Manager At-Risk (CMAR) holds the subcontract agreements.
Owner’s trusted construction expert who advises the Owner and acts as a
“go to” person for all aspects of the project including design,
constructability, value-engineering, scheduling, negotiations with Architect industry. Construction projects can be broadly classified as (a) building
and Contractors, and qualification of design professionals, Contractors, and construction, (b) engineered construction, and (c) industrial construction,
subcontractors. It is important to note that the CM (Agency) is an advisor depending on whether they are associated with housing, public works, or
but is not accountable for schedule and budget and that the Owner enters manufacturing processes.
into the trade contracts, not the CM (Agency). Depending on how the
contract is structured, the CM (Agency) may be compensated for some
general condition items. This agreement places the majority of the risk CONTRACT DEVELOPMENT
during construction on the shoulders of the Owner.
People often associate engineering with the invention and construction of
infrastructure such as industrial plants, roads and bridges, but there is more
than meets the eye when it comes to this profession. Of the many fields of
study, Detailed Engineering Design is perhaps one that needs more
exploration.

Detailed engineering is the phase in project implementation that applies all

technical disciplines needed (i.e. mechanical, civil, electrical, piping,
automation, telecommunications, instrumentation, etc.) to establish the set
of deliverables.
The mission of construction is constrained in terms of the available time and
amount of available money. The challenge faced by the construction Legally, “No bidding and award of contract for Infrastructure Projects shall
manager is to apply the resources of workers, machines, and materials be made unless the detailed engineering investigations, survey and designs,
within the limited funding (money) and time available. This is the essence of for the project have been sufficiently carried out and duly approved in
construction. accordance with the design standards and specifications prescribed by the
Head of Procuring Entity concerned…”
The job of a construction manager is to efficiently and economically apply
the required resources to realize a constructed facility of acceptable quality Detailed engineering is a very important process in any project that requires
within the time frame and budgeted cost specified. Among the many watch the application of knowledge into action. It is significant and invaluable in
words within the construction industry is the expression ‘‘on time and within any project. Properly developing every part of the design ensures that the
budget.’’ More recently, the concept of quality as a requirement has end-user can enjoy the safety and satisfaction that a well-designed
become an increasingly important aspect of the construction process. So engineering project can produce.
this old adage can he expanded to say ‘‘a quality facility on time and within
budget.’’

Since the construction sector is so diverse, it is helpful to look at the major

types of projects typical of construction to understand the structure of the
2.3 ESTIMATING AND VALUE ENGINEERING PURPOSES OF ESTIMATES

During development of a project the client normally looks for construction Estimates are used for a number of different purposes in construction:
cost estimates. It is advisable to provide a probable cost of construction at
completion of the schematic design, design development, and construction • Determining the feasibility of a project
document phases. A design contingency is usually carried in cost estimates. • Calculating an approximate price of a project
It can be reduced as the documents are further developed. At completion • Providing value analysis
of the construction documents, the architect prepares, or has a consultant • Calculating & establishing bid prices
prepare, a final and most accurate estimate of construction cost, which can • Determining project budgets in cost control
be used for comparison with the bids submitted to perform the work.
TYPES OF ESTIMATES
Value engineering may be performed by consultants and construction
• Detailed Estimates
managers during the development of the construction documents. Value
• Square-Foot Estimates
engineering should address operating and maintenance costs as well as first
• Parametric Estimates
costs, to provide true life-cycle cost estimates for comparative analysis.
• Project Comparison Estimates
Value engineering is a systematic method to improve the “value” of a
Detailed Estimates
product or service that the project produces. It is an integral component of
project quality. • Determination of the quantities and costs of everything that is
required to complete the project.
• This includes materials, labor, equipment, insurance, bonds and
WHAT IS ESTIMATING? overhead, as well as an estimate of the profit.
• To perform this type of estimate, the contractor must have a
Estimation (or estimating) is the process of finding an estimate, or
complete set of contract documents.
approximation, which is a value that is usable for some purpose even if input
data may be incomplete, uncertain, or unstable. Square Foot/Approximate Estimates

• In construction, it is an approximation of cost of a project to the • Prepared by multiplying square footage of a building by a cost per
contractor. square foot and then adjusting the price to compensate for
• A process of calculating costs of a construction project based on a differences in the building heights, length of the building
design proposal and using comparisons with similar projects to perimeter, and other building components.
establish budgets prior to final pricing.
Parametric Estimates

• Parametric estimates use equations that express the statistical

relationship between building parameters and the cost of the
building.
 • The building parameters used in the equation may include the SIMPLIFIED ESTIMATING PROCESS
gross square footage, number of floors, length of perimeter,
percentage of building that is common space and so forth.

Project Comparison Estimates

• Prepared by comparing the cost of a proposed project to a

completed project.
• When preparing an estimate using this method, the estimator
starts with the costs of a comparable project and then makes
adjustments for differences in the project.

ROLE OF AN ESTIMATOR

To be an estimator, an individual needs to go a step further. He or she must:

• Be able, from looking at the drawing, to visualize the project

through its various phases of construction.
• Have enough construction experience to possess a good
knowledge of job conditions, including methods of handling
materials on the job, the most economical methods of construction
and labor productivity.
• Have sufficient knowledge of labor operations and productivity to
convert them into costs of a project.
• Be able to keep a database of information on costs of all kinds.
• Be computer literate and know how to manipulate and build
various databases.
• Be able to meet bid deadlines and still remain calm.
• Have good writing and presentation skills.
MEASURING QUANTITIES AND ITEMS OF WORKS IN BUILDINGS - It is the removal of earth from its natural position.

The Quantity Take-Off Rules of Measurement: All excavation is measured net with no allowance
for increasing in bulk after excavation or for the extra space required for
o Refers to the scaling or transferring of critical dimensions
working space or to accommodate earthwork support.
of construction components from drawings to paper or
software that are quantified as units of measurement. o Disposal

o This also includes a description of works that are - It is defined as the action or process of throwing away or getting rid of
influenced by the appropriate measurement guide. something.

Organization Of Quantity Take-Off Rules of Measurement: Disposal is based on all excavated material off site
and measured in terms of volume, m3
o The order of the take-off will generally follow the
sequence of work activities of the project and, o Fillings
conveniently for the estimator, the contract drawings are
- It is defined as a quantity of material that fills or is used to fill something.
usually presented in this sequence.
Rules of Measurement: Filling is obtained from excavated material which
Methods of Measurement
includes topsoil and any other material arising from the excavations that
o Principles of Measurement – International (POMI) have been specified to remain on site and measured in terms of volume, m 3.

o Philippine Standard Method of Measurement (PSMM) • In Situ Concrete Works

o Standard Method of Measurement of Building Works: o In situ concrete

7th edition (SMM7)
- It is concrete deposited in the place where it is required to harden as part
of the structure.

Measuring Items of Works in Building Projects Rules of Measurement: Concrete volume is measured net. Deductions are
not made for the reinforcement, steel sections and voids smaller than 0.05
• Excavating and Filing
m3 (except voids in troughed and coffered slabs)
o Site clearance/preparation
o Formwork
- It is the removal of natural obstruction across the site such as grass,
- It is a temporary construction to contain wet concrete in the required
bushes, shrubs and trees.
shape while it is cast and setting.
Rules of Measurement: Site preparation is measured in terms of area, m2.
- This can be made of steel, wood, aluminum and/or prefabricated forms.
o Excavations
Rules of Measurement: It is measured to the faces of all cast in place C. Anchorage & Lap Splice Length
concrete which requires to be supported while the concrete sets. No
deductions shall be made for voids smaller than 5.00 m2. • Lap length is the length of bar overlap when bars are tied together
for extending the reinforcement length.
o Reinforcement • Anchorage length is the additional length of steel required to be
inserted from one structural member into another structural
A. Types of Steel Bar
member at the junction.
• Mild steel bars are plain in surface and are round sections of
diameter from 6 to 50mm.
• High yield steel bars are rods of steels provided with lugs, ribs or
deformation on the surface of the bar, these bars minimize
slippage in concrete and increases the bond between the two
materials.

Rules of Measurement:

1. Measure separately for different types of steel bar.

2. Measure separately for different size/diameter.
3. Forming hooks, tying wire, spacers, cutting/splicing and bending
are deemed included.
4. Chairs and connectors are deemed included unless not at
discretion of contractor.

B. Concrete Cover Provision

• Concrete cover is the distance from the outer face of an element

to the outer girth of reinforcement and is provided to ensure that
there is adequate protection to steel reinforcements that are not
exposed from the concrete and thus prevent rusting.
D. Hooks F. Computation for Lengths & Number of Stirrups

• These are very significant especially when measuring links or • Computation for length of outer stirrups / links:
reinforcement that is bent up or bent around another bar. These
S = 2 x (w + d) – 8 x cc + hook
are usually given as multiples of bar diameter or given as specific
lengths in tabulated form. where:
Rules of Measurement: s = stirrup / link
1. Make sure to read the specifications or general notes and checked w = width of beam
all notes on plans you will be using and all other relevant
documents. d = depth of beam
2. Study carefully the drawings and details given. Make sure that you
cc = concrete cover
understand clearly the details given.
3. Check if there is enough information given to be able to measure hook = specified length or as multiples of stirrup diameter
lengths. Be sure to check specifications and general notes.
4. Tick off or loop through bar marks measured to check if all • Computation for the number of outer stirrups / links:
reinforcement for the particular element has already been taken or N = (L – 2 x cover from face of support) / spacing + 1
measured.
5. If there are any uncertainties in the details, make a query on this. where:
6. Check for any assumptions made to be put in measurement notes.
N = number of stirrups / links
7. Unit weight of rebar per meter is calculated by the surface area of
steel multiply by the density of steel. Thus, kg/m = (π D2/4) x 7850 L = clear length
kg/m3 or simply kg/m = D x D x 6165 kg/m3
G. Measurement of Slab Reinforcement
E. Measurement of Beam Reinforcement
There are two general types of slabs with regards to its load carrying
• Typically, reinforcement to ordinary beams will comprise of top bar capacity:
reinforcement, bottom bar reinforcement, links or stirrups and side
bars. • One-way slab – slab supported by beam / wall support (parallel to
• End conditions for beams are usually given with anchorage length, the long span) and whose reinforcement runs in one direction only,
either given lengths in tabulated form or given as multiples of bar i.e. from support to support.
diameter. S/L < 0.50 : S = SHORT SPAN, L = LONG SPAN
• Pay particular attention where anchorage length is measured from,
which is usually from the inner face of support or from the
centerline of support.
 • Two-way slab – slabs which are supported on four sides and are I. Measurement of Wall Reinforcement
reinforced in two directions. Reinforcement is placed in such a way
• Reinforcement to walls comprised primarily of horizontal bars and
to transmit loads to the four supporting beams.
vertical bars. For thicker walls, links or binders may be provided.
S/L > 0.50 : S = SHORT SPAN, L = LONG SPAN • Measurement of reinforcement will still be generally the same as
the column.
Rules of Measurement:
• Adjustment to wall reinforcement due to openings in walls:
1. Always check if distribution bars have been provided, especially for
- Always check from elevation or from framing plans for locations
top bars. Unless top bars are continuous from support to support,
of wall openings like openings for doors, windows, etc. and make
there will always be distribution bars to main top bars.
sure that all necessary adjustments are made.
2. Pay careful attention that spacing for bars are not interchanged
between the two directions. - When measuring walls with openings, treat walls as if there is no
3. Pay attention for slabs that have drops in them. Extra details may openings in it, and later make the adjustments.
be provided or adjustments are to be made.
- Adjustment to opening in walls can be dealt with similarly to
H. Measurement of Column Reinforcement adjustment for slabs with voids or openings.

Basically, column reinforcement is made up of vertical bars and links. J. Measurement of Stair Reinforcement

• Computation for vertical bars: • Reinforcement to stair comprised primarily of the main bars,
secondary bars, nosing and chairs (as required).
When measuring vertical bars, always check the end conditions of the bars
• Measurement of reinforcement to stair stringer and stair landing is
and check for location of laps / anchorage lengths. Floor to floor height must
similar to the one way slab.
be verified from the framing plans, especially at termination points.
• Computation for the length of nosing bar and chair bar:
• Computation for links in column:
Nb = w – 2 x cc
Length of links – can be computed in similar way as the links / stirrups in
Cb = t + r – 2 x cc + 2 x AL
beam
where
Number of links - There are two (2) conditions to consider when computing
for number of links: Nb = nosing bar
1. when links are to be provided at clear height only w = width of stair
2. when links are provided at entire floor height including at
intersections with other members cc = concrete cover

AL = anchorage length
 • Doors and Frames

Cb = chair bar - Doors and door frames shall be enumerated stating their size and
type of material.
t = stair tread
• Windows
r = stair riser
- To measure this work, individual windows shall be enumerated
• Computation for the number of nosing bar and chair bar:
and fully described together with the rough opening sizes for the
Nosing bar = as per number steps units.

#Cb = [round((w – 2 x cc) / spacing) + 1] x number of steps • Miscellaneous Metals

• Finishing And Miscellaneous Works - The miscellaneous metals trade has a wide scope that in very
o Finishes general terms can be defined as metal items that are neither part
of the structural steel work nor part of any other trade section.
- Work shall be measured flat without addition for laps or Some of the common items contained in this section and their
seams. Internal and external work shall each be so described. measuring methods are as follows:
Rules of Measurement: 1. Measure miscellaneous angles and channels in linear feet or
meters, stating the size and location of the items.
1. Finishing shall be measured by area, classified as follows:
2. Measure in square feet or square meters and fully describe grates,
o Floors, which shall include landings
grilles, grillwork and louvers that are not part of the mechanical
o Walls, which shall include returns, reveals of openings or
system. Measure frames for this works in linear feet or meters,
recesses and attached and unattached columns
stating size and type of section.
o Ceilings, which shall include attached and unattached
3. Measure in linear feet or meters and fully describe metal handrails,
beams and soffits of staircases.
railings and balusters.
o Staircases, which shall include treads, risers and edges of
4. Enumerate and fully describe ladder rungs.
landings but exclude soffits.
5. Enumerate and fully describe metal corner guards.
2. Skirtings, coverings to kerbs, or the like shall be measured by length
3. Suspended ceilings shall be measured by area, classified as follows:

- Ceilings stating the drop

- Sides and soffits of beams or upstands

 • Specialties • Finish Hardware

The specialties trade is another wide-ranging trade section of the Finish hardware includes the following items that shall be enumerated and
specifications that includes items of work as the following: fully described:

- Bulletin boards - Hinges

- Signs - Flush bolts

- Folding partitions - Bumper plates

- Storage shelving - Deadlocks

- Mail boxes - Doorstops

- Toilet partition - Lock sets

- Bathroom accessories - Latch sets

Enumerate and fully describe the following items: - Kick plates

- Shower curtain rods - Panic hardware

- Soap dispenser units - Push plates

- Grab bars and towel bars - Pull bars

- Mirrors - Door closers

- Napkin dispensers • Masonry Works

o Includes construction with clay bricks, concrete ricks and
- Toilet roll holders
blocks, clay tiles, and natural and artificial stone.
- Towel dispensers o Hollow Block Sizes

- Waste receptacles 400 X 200 X 200 mm (8” thick)

- Medicine cabinets 400 x 150 x 200 mm (6” thick)

- Coat hook 400 x 100 x 200 mm (4” thick)

Rules of Measurement: • Flat coverings
• Sloping coverings
1. Masonry work is measured “net in place” and the necessary
• Vertical coverings
allowances for waste and breakage are considered later in the
3. Insulation:
estimating process when this work is priced.
2. The units of measurement for masonry are generally the number Insulation shall be measured by area; alternatively, it may be described with
of masonry pieces such as concrete blocks. items of composite roofing.
3. Calculating the number of masonry units involves a two-stage
process:
o The area of masonry is measured Pricing Direct and Indirect Items
o A standard factor is applied to determine the number of
masonry units required for area measured. Direct Items

4.Measurement for mortar in cubic meters is deemed included. • Materials

• Labor And Equipment
• Labor Hours And Productivity
• Structural Metal Work • Subcontractor’s Work

Unless otherwise stated, structural metalwork shall be measured by weight,

classified as follows:
Material Rates
o Grillages (wiremesh)
The materials used in a construction project fall into two broad categories:
o Beams
o Portal frames (steel columns & rafters) • Materials that form part of the finished structure such as concrete
o Roof trusses
o Support steelwork • Materials that are consumed in the construction operations such
as fuel oil

Most unit prices used to price materials are based on quotations from the
• Thermal and Moisture Protection suppliers of these materials, seldom are the unit prices used in the estimate
obtained directly from the suppliers. Even where suppliers do quote prices
Rules of Measurement:
for the same unit of measurement as the estimate, like concrete, the
1. Work shall be measured flat without addition for laps or seams. suppliers’ prices need to be adjusted to account for wastage of materials.
2. Coverings & linings:
When pricing any materials, there are a number of questions that should
Unless otherwise stated, roofing, tanking, waterproof coverings, linings or be answered before the prices are used in an estimate:
the like shall be measured by area, classified as follows:
 • Do the materials offered by the supplier comply with the worker working for one hour. Determining the labor hours requires knowing
specifications? the quantity of work to be placed and the productivity rate for the specific
crew that will perform the work. The productivity rate is often expressed as
• Do the prices quoted include delivery of the materials to the site? a number of labor hours per unit of work, although it may also be expressed
• Can the contractor rely on the supplier’s prices to remain firm until as the quantity of work performed by a crew during a standard eight-hour
the owner awards the contract? day.

• Does the supplier’s price include state or city sales taxes? The productivity rates can come from a number of sources, but the most
reliable source is historical data. General formula is expressed as:

Productivity Rate = Labor Hours ¸ Quantity

Labor And Equipment Rate
Labor Hours = Quantity x Productivity Rate
There are two basic methods of pricing labor and equipment:
The productivity rate that is used, if derived from historical data, is for the
• First method: the estimator uses productivity rates to convert the average or standard conditions for the projects used in calculating the
take-off quantities into labor-hours and equipment hours, and then historical production rate. On many occasions, the project that is being bid
applies wage rates and equipment rates to the total hours to obtain deviates from these standard conditions. Therefore, the number of labor
the estimated labor and equipment prices for the project. hours needs to be modified to take into consideration how the project that
is being bid deviates from the standard condition. This is done by using
• Second method: the estimator makes use of unit prices that are a productivity factor.
applied to listed take-off quantities to calculate the total labor or
equipment price for the work involved. Adjusted Labor Hours = Labor Hours x Productivity
Factor
Whichever method of pricing is used, it is clear that there is a high-risk
factor in pricing labor and equipment because each involves two • When the conditions slow the progress of the work, a productivity
components that are subject to variations that can be difficult to predict. factor greater than one is used, thus increasing the number of
The two factors are as follows: labor hours to complete a unit of work.

• The hourly wage rate of labor or hourly cost of equipment • When the conditions increase the speed at which the work
progresses, a productivity factor less than one is used, thus
• The productivity of the labor or equipment decreasing the number of labor hours to complete a unit of work.

Following are some variables that need to be considered when determining

Labor Hours And Productivity the productivity factor:

Estimating labor requires determining the number of labor hours to do a • Availability and productivity of workers
specific task and then applying a wage rate. A labor hour is defined as one
 o When there is plenty of work available and workers are Pricing Indirect Items
scarce, less trained craft persons are accepted. These less-
Indirect Items
trained persons will require more time or labor hours to
complete the required task, and a productivity factor o Overhead And Supervision
greater than one is used.
o SSS / ECC / MC / VL / SL
o Conversely, when construction projects are scarce,
workers may become motivated, and the contractor can o Bond Premium
be selective and hire only the most qualified workers. This
o Contingencies And Miscellaneous
will result in producing more work per labor hour, and a
productivity factor less than one is used. o Contractor’s Tax

• Climatic conditions Overhead And Supervision

- cold, hot, winds, rain, snow and combinations of these all affect the – to be computed on the estimated manpower requirement as prescribed
amount of work that can be produced in an hour. Typically, any weather in the contract conditions
extremes will slow down the work pace and may require additional
Bond Premium
precautions that add labor hours to the project.
(i.e., the given Bid Amount is PHP 5,000,000.00)
• Working conditions
o Bid bond (based on surety bond)
- the job site working conditions can have a great effect on the rate of
work. A project being built in the city with little working space, limited ▪ Bid bond = 10% x PHP 5,000,000.00 = PHP
storage space and difficult delivery situations typically has less work 500,000.00
accomplished per labor hour just due to the difficulty of managing the
resources. o Contractor’s All Risk

To price labor, first the estimator must estimate the labor hours required to ▪ Bid amount x 3% = amount of premium
do the work. These labor hours can then be multiplied by the hourly wage ▪ Php 5,000,000.00 x 0.003 = PHP 15,000.00
rate to develop the labor costs.
o Performance bond (20% of Bid Amount)
Labor cost = Adjusted Labor Hours x Hourly Wage Rate
▪ 20% x PHP 5,000,000.00 = PHP 1,000,000.00