02 Chptr - 11 2 The Construction Business Environment Key...

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11 2 The Construction Business Environment Key Terms Addenda Agency CM Agreement American Institute of Architects (AIA) Approved set As-builts (record set) Associated General Contractors (AGC) Best value Bid set Building codes CM at Risk Commercial building Construction Construction Specifications Institute (CSI) Contract set Delivery system Design-bid-build Design-build Design development Engineering construction Engineers' Joint Contract Documents Committee (EJCDC) General conditions Industrial construction Integrated services delivery MasterFormat Owner-builder Planning codes Preconstruction services agreement Project delivery system
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Project manual Qualifications-based selection (QBS) Residential construction Schematic design Specifications Supplementary conditions Key Concepts "Say it once in the right place."— Construction Specifications Institute (CSI) tenet. The Achilles' heel of many in the construction industry is the failure to adequately conceive, develop, and implement all elements of the management cycle: planning, organizing, executing, monitoring, and adapting. "If you can't measure it, you can't manage it."— Words of wisdom from the management industry. Objectives Explain the extent to which the construction industry affects the national economy. Describe how construction projects originate and evolve. List the fundamental project delivery systems and explain their differences. Identify the principal components of a contract for construction and the role each plays. Discuss some of the challenges a builder faces when using construction drawings. 12 The Construction Industry The construction industry accounts for up to 5% of the gross domestic product (GDP), or close to half a trillion dollars 1 (2001), the vast majority of which is privately financed. Considered a bellwether industry, it employs a significant percentage of the industrial workforce directly and indirectly. 1 Bureau of Economic Analysis, U.S. Department of Commerce. Construction is a fragmented industry made up primarily of small businesses, is easily penetrated by competition, and no significant advantage derives from being established. A disproportionate number of business failures overall occur in construction, due in part to: Mismanagement of resources Insufficient planning Poor accounting and collection practices Inadequate insurance for catastrophic losses Lack of experience in a particular type of construction
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Operating in unfamiliar geographic regions Too-rapid growth Loss of key personnel Types of Construction Residential Construction Residential construction projects—single-family homes, duplexes, condominiums, low- and high-rise apartments—represent a significant percentage of the market. Although some states permit individuals without design professional licenses to design single-family and duplex structures, architects commonly design these projects.
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