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Unformatted text preview: MIT OpenCourseWare 1.040 Project Management Spring 2009 For information about citing these materials or our Terms of Use, visit: Project Organization Project Management 1.040/1.401J Spring 2009 Spring Fred Moavenzadeh Department of Civil and Environmental Engineering Massachusetts Institute of Technology Broad Delivery Method Space Broad Direct Financing Integrated Organization Segmented Organization Indirect Financing Most Common Delivery Methods Most Owner Owner A/E General Contractor C/M Subcontractor Subcontractor Subcontractor Traditional Design-Bid-Build Trade contractor Trade contractor Trade contractor Design - Build Owner A/E Trade contractor Trade contractor Pure or Agency Construction Management Owner C/M A/E Trade contractor Construction Management at Risk Contractual Relationship Communicational Relationship Constructio D/B Entity n Function Sub contractor Sub contractor Design Function Sub contractor A Bit of History (Western World) Bit „ „ Antiquity, Middle Ages: Design build 15th century „ „ „ 18th century: Century of engineering „ „ „ General contractor in charge of trades, little subcontractors Before 1930s: mixture of methods „ „ Greater Distinction between architect & trades Greater attention to design Most design-build, some with alternative financing (94%) Post WWII: Emergence of more specialized needs, subcontracting 1960s, 1970s: More complicated structures, emergence of CM, constructability needs Traditional Delivery Method Traditional Owner A/E General Contractor Subcontractor Subcontractor Contractual Relationship Communicational Relationship Subcontractor How To: Traditional How „ „ „ „ Hire a design professional in charge of the preparation of the design and contract preparation documents documents Competitive bid or negotiation with contractors after design complete contractors after Contractor in charge of the delivery of the completed project (may decide to completed subcontract) subcontract) The contractor is the only one responsible of the execution of the work the Traditional Delivery Method Traditional „ „ „ Sequential Construction Process Collaborative Relationship between A/E (Chosen on Qualification Basis) and Owner (Chosen Different Participants’ Interests: Owner: Quality and Value Product, Delivery Schedule Schedule „ Contractor: Profit, Construction Time, Site Safety, Relationships, Reputation Safety, „ A/E: Profit, Aesthetics, Relationships, Quality, Recognition Recognition „ „ Lump Bids Commonly Adopted, Resulting in Adversarial Relationship between the Owner Adversarial and the Contractor and General Contractor General Responsibilities Responsibilities „ Still responsible for a large fraction of jobs „ „ For larger job, GC doesn’t do much of work (sometimes <10%) „ „ Particularly public jobs with bidding Sometimes verge up against CMs CMs Division of responsibility for problems (Different teams) teams) Owner must mediate fights between contractor, designer „ Contractor designs temporary structures „ Engineer needs to stamp (often not designer architect) not Subcontractors Subcontractors „ GC manages most subcontractors „ „ „ „ „ „ Overhead at each level Handles submittals Get bids from subcontractors (bid shopping a danger; no formal guarantee of award of contract) Can be large number of subcontractors Responsible for failure Responsible Shop drawings typically produced by subcontractors „ „ „ E.g. engineer consultants Signed off on by architect to say that meets design needs Problem: Things can fall through the cracks Subcontractors 2 Subcontractors „ „ „ „ „ „ Motivations „ No In-house ability „ GC overstretched „ GC lacks familiarity with local conditions „ Need to get warrantees „ Laws and regulations (assign subs to contractor) „ Due to specialization, more efficient, cheaper Sometimes GC provides equipment to subs Tensions (e.g. how quickly, many subs on site) Subcontractor management very important for productivity Sometime owners or GC put umbrella insurance over Required to have bonding by owner Role of Architect/Engineer Role „ Typically negotiated contract „ „ „ „ Recruited on service rather than commodity basis Financial stability, other factors critical Sometimes have design competition Don’t want to push too low: „ „ „ „ Poor design Poor personnel No time for double-check Contrast „ „ Price of design has small impact on overall price Quality of design has big impact on overall price Role of Architect/Engineer II Role „ „ „ If estimates off, may be required to redo design at own expense expense Carry errors and omissions experience Limited participation in construction process „ Typically “observes” constructions „ „ „ „ Avoid official assumption of inspection guarantees Review shop drawings – with disclaimers Avoids close communication with GC Do not want to direct construction methods „ May put suggestion in contract documents Advantages Advantages „ „ „ „ „ „ „ „ Well known method (courts, companies) Flexibility during design (vs. design-build) Cost defined early (when bidding) Good contractual protection for the owner Open bidding procedure very easy Owner not too involved in the construction process process Fiduciary relationship between A/E & owner Good if uncertainty primarily in design Disadvantages Disadvantages „ Design not reviewed before construction Miss opportunities for major time/cost savings „ May yield changes due to constructability probs probs „ „ „ „ „ Sequential and linear process preventing from overlapping of tasks and money saving overlapping Few interactions among the participants Too rushed to consider multiple alternatives Construction can’t start until design is complete complete Disadvantages II Disadvantages „ „ „ Innovative financing difficulty Leads to very conservative design strategies Difficult for complex projects How To: Construction How Management Management „ „ „ The Owner hires both a design firm and a construction management firm before the construction before beginning of the construction of the project beginning Typically CM selected based on quality Many variations are possible in the delivery method depending mostly on when the method management team is hired and its skills management General Characteristics General „ Started in late 1960s World trade center „ Madison Square Garden „ „ „ „ May recommend A/E Check billings Specific CM firms tend to be quite sophisticated Warning: Many GCs claim CMs CMs „ “design CM”, “construction CM” “owner CM” „ Tasks Tasks „ Preconstruction „ „ Constructability, value eng, estimation, alternatives, schedule, financing, manage designer, early schedule, procurement procurement Field supervision „ QA, Targets met, invoice checking, coordinate work of contractors, M&E, change orders, payments, of claims, inspections for design requirements, claims, sometimes safety sometimes CM General Advantages CM „ Involvement in design allows better Knowledge of price early own „ Eliminates risks in design before bids „ Constructability, value engineer. reasoning from start „ Working construction constraints into design plans „ „ „ „ Allows flexibility in the Schedule (Fast tracking ) Can select CM based on quality Really familiar with plans before price/get bids CM General Disadvantages CM „ „ Don’t know total cost when start construction Potential conflicts with other parties Designer „ Subcontractors „ (Where applicable) GC „ Pure (“Agency”) Pure Construction Management Construction Owner C/M Trade contractor A/E Trade contractor Contractual Relationship Communicational Relationship Trade contractor Pure Construction Management Pure „ „ „ „ „ „ „ Great Flexibility in the Schedule and for Changes Changes Market Competition for subcontracts Fiduciary Relationship with the Contractor Small Financial Risks of PCM and High Risk of Loss of Reputation Loss PCM Generally Paid a Fixed Fee (professional) Take over work of designer, GC, owner PCM as Facilitator/Mediator in Conflicts Advantages Pure CM Advantages „ „ „ „ „ Great Flexibility for Changes CM more objective, less partial Less conflict between owner and CM Small Financial Risks of PCM Have both „ Cost competition (for subcontractors) „ Often 5-8% savings for dealing directly with subs „ „ „ „ Fiduciary relationship with GC One common reference point: The CM Owner can get rid of particular subcontractor Lessens owner’s responsibilities Disadvantages Pure CM Disadvantages „ „ Lower incentive for CM to reduce price, time Owner alone takes risk on cost of project „ „ „ „ No guarantee from CM! Participants must all be cooperative and well communicating communicating High Risk of Loss of Reputation All parties must be committed from the beginning beginning Lessens Owner’s Responsibility Lessens „ E.g. „ „ „ „ „ „ „ „ „ Project control Job meetings Management meetings Reports (operational and annual) Administrative tasks Budgets Drawing approval Oversight Quality assurance Central Artery / Big Dig Central Central Artery / Big Dig Central „ „ „ „ Most complex highway project in American history history The project consist in building 161 lane miles of urban highway - about half underground in of a 7.5-mile corridor 7.5 Planning for the Central Artery/Tunnel Project began in 1982 Project Congress approved funding and the project's basic scope in April 1987 basic Central Artery / Big Dig Central For the Fort point channel: „ Notice to proceed was granted to Modern Continental on March 7 1997 Continental „ Expected date of completion: March 13 2002 „ Estimated cost: 301,377,284.10 $ „ Modified estimated cost: 403,929,276$ „ Modified date to completion: December 2004 „ Engineers + consultants = 100 „ Workers on the site = 800 „ Priorities = schedule- cost- technical Project Organization Project 9 Project Delivery Systems (most common) 9Traditional 9Pure Construction Management ¾ Construction Management at risk „ „ Design / Build Summary Construction Management at Construction Risk Risk Owner C/M Trade contractor A/E Trade contractor Contractual Relationship Communicational Relationship Trade contractor Construction Management at Risk Construction „ CM usually Guaranteeing Maximum Price: usually Guaranteeing GMP to give the owner security that the GMP project will be built within budget project Often set at 95% of design „ This is a big difference from pure CM „ Fee typically 10-15% „ „ „ „ „ Reduced Owner Risk Risk-wise, ½ between the DBB and the PCM System (VERY similar to GC hired early) System Contractual Relationships betw. CM&subs betw CM&subs Performance bonds typical Advantages CM at Risk Advantages „ „ „ Reduced Owner’s Risk CM at risk usually goes with Guaranteed Maximum Price (GMP) Maximum Contractual Relationships between CM and Trade Contractors Disadvantages CM at Risk Disadvantages „ „ „ The GMP is a defined price for an undefined product product Bad during design: Design pressure Tension CM hired early: more price risk „ CM hired late: less value during design „ „ „ „ CM is no longer impartial (may argue against changes b/c of own interest) changes b/c Risk of adversarial relationship The contract can be hard to enforce „ „ „ „ „ „ „ Albert and Barrie Zesiger Sports Albert Zesiger and Fitness Center and Groundbreaking : October 2000 October Occupancy : 2002 Designed by the architectural firms of Roche & Dinkeloo and firms Dinkeloo Sasaki Associates Sasaki Construction: Turner Construction Co. Construction Cost : $45 million Olympic-class 50-meter pool An 11,000-square-foot fitness center center ...
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This note was uploaded on 11/29/2011 for the course CIVIL 1.018j taught by Professor Markusbuehler during the Fall '08 term at MIT.

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