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Another Brick in the Wall Understanding Construction Management

Another Brick in the Wall Understanding Construction Management By: John Knox, Vice President The Chamberlain Companies Presentation Process Explain the differences Discuss how these differences affect clients Examine the benefits/challenges of Construction Management

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Another Brick in the Wall Understanding Construction Management

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  1. Another Brick in the Wall Understanding Construction Management By: John Knox, Vice President The Chamberlain Companies

  2. Presentation Process • Explain the differences • Discuss how these differences affect clients • Examine the benefits/challenges of Construction Management • 15-20 minutes for question/answer period at end of presentation

  3. Construction Management Construction Management is a concept which integrates the design and construction processes. It joins the Owner, Architect, and Builder into a team to produce a facility which best meets the functional requirements and aesthetic needs of the Owner within the authorized budget and occupancy schedule.

  4. Construction Management (CM) • Not Project Management • A contractual agreement for the construction of a project • Unlike General Contracting and Design/Build, CM is an “open book” method • GC’s profit and overhead are included in his “stipulated sum” price • Construction Manager paid a negotiated fixed fee or percentage of construction cost • Team Approach - CM hired early in the process to develop schedule and cost estimates, and provide input during design process

  5. Stipulated Sum vs. Open Book • Stipulated Sum • Lump sum amount quoted for the construction of a project • Examples are General Contracting and Design/Build • Open Book • All construction costs are disclosed openly to the Owner • Transparent process with Owner actively involved in award of contracts

  6. Div. 1 – General Requirements (Site Super, Labour, Fencing, Insurance, etc.) Div. 2 – Site Work Div. 3 – Concrete Div, 4 – Masonry Div. 5 – Structural Steel Div. 6 – Wood & Plastics Div. 7 – Thermal & Moisture Protection Div. 8 – Doors & Windows Div. 9 – Finishes Div. 10 – Specialties Div. 11 – Equipment Div. 12 – Furnishings Div. 13 – Special Construction Div. 14 – Conveying Systems Div. 15 – Mechanical Div. 16 - Electrical Construction Divisions

  7. So, While there is no difference in Construction Means and Methods The difference lies in .. • Philosophy • Contract • Control

  8. Philosophy - CM • A portion of his fee is for pre-construction services during the design phase • Questions architectural decisions along the way with the focus on value • The Construction Manager – Advisor during design stage and the Owner’s Representative during the construction stage • Less chance of dispute with Owner or Architect as CM involved in design process, and does not profit from omissions or changes

  9. Philosophy - GC • Design – Bid – Build Process. GC not involved until design process completed • His only responsibility is to build what was tendered • GC will price and produce exactly what is shown on drawings. Grey areas, omissions, or changes are all opportunities for profit • Relationship between Owner, Architect, and GC can become confrontational when problems occur

  10. General Contracting Contract Control Control of the Site • Working drawings and specifications completed and all divisions tendered as one package to General Contractors • Contract between Owner and General Contractor • General Contractor has contracts with each of the Trade Contractors • GC’s Site Super manages Site and Trade Contractors

  11. Construction Management Control of the Site Contract Control • Divisions divided into tender packages, drawings & specifications for each package completed, and tendered individually and sequentially • Owner contracts directly with Trade Contractors • CM’s Site Super manages Site and Trade Contractors

  12. Contract Control Construction Management by Architect Chamberlain regularly performs both roles – Architect and Construction Manager

  13. Greatest Risks on aConstruction Project are … • Unknown conditions • Facility not meeting expectations • Bankruptcy of Constructor • Exceeding the budget or schedule • Inclement weather

  14. Client Concerns • Risk Exposure • Control over Site, Costs, and Schedule • Flexibility • Deal with unexpected situations • Ability to make changes without paying a premium • Image • Value • Cooperative Team Relationship

  15. Risk is Minimized by Maximizing Control and Flexibilityduring the Construction Process

  16. Control • Owner contracts and is dealing directly with the Trade Contractors • He who pays the piper calls the tune

  17. Flexibility • Possible to start construction before design finalized • Owner has a longer time to determine specific requirements because packages sequentially tendered • Good for fast tracking a project • Establishes project cost early • Owner doesn’t pay a premium for changes • Allows for continued operation during construction • Allows for incorporation of donated materials/labour • Allows for inclusion of local trades/suppliers

  18. Reality of Stipulated Sum Contracts • Price is indicative of the opportunity at that moment in time • Price only fixed if absolutely nothing changes during construction • Generally, the GC is forced to use lowest trade/supplier prices to get the job • 100% price driven

  19. The Bottom Line The price shown on a Stipulated Sum Contract is the least you are going to pay for your building not the most.

  20. Value Div Sub Trades GC #1 GC #2 GC #3 Lowest CM 1 GENERAL 132,318 133,400 132,600 132,318 2 SITE WORK 306,334 272,585 304,384 272,585 3 CONCRETE 37,508 42,775 26,594 26,594 4 MASONRY 44,261 42,000 41,099 41,099 5 METALS 72,522 77,049 107,099 72,522 6 WOOD & PLASTICS 47,015 42,244 53,681 42,244 7 THERMAL/MOISTURE 56,768 64,798 68,186 56,768 8 DOORS/WINDOWS 88,275 88,905 85,462 85,462 9 FINISHES 141,916 135,016 133,974 133,974 10 SPECIALITIES 27,508 28,682 36,411 27,508 14 CONVEYING 28,261 27,535 29,274 27,535 15 MECHANICAL 176,606 215,959 188,847 176,606 16 ELECTRICAL 173,394 177,699 180,811 173,394 TOTAL: 1,332,686 1,348,647 1,388,422 1,268,609

  21. Savings Accrue to Owner

  22. Challenges of Construction Management • Owner more involved in construction process • More paperwork – construction draws to be approved under guidance of Construction Manager • Upside – complete paper trail for all monies spent on the project and an excellent opportunity to learn about the design and construction process

  23. Projects built under Construction Management Canadian Warplane Heritage Museum Air Traffic Control Tower, Toronto Pearson Int’l Airport

  24. Lincoln Public Library, Rittenhouse Branch Shelburne Public Library Addition & Restoration

  25. Niagara-on-the-Lake Public Library

  26. Quinte West City Hall/ Public Library

  27. Other Projects

  28. To Re-cap…

  29. Wrap Up… • Able to fast track, if necessary • Early establishment of project costs • Cooperative relationship – less stressful for Owner • Provides Owner with more Control and Flexibility during construction • Realizes best Value for Owner

  30. Another Brick in the Wall Understanding Construction Management By: John Knox, Vice President The Chamberlain Companies

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