Summary of a Basic Construction Project

Brief summary of a Construction Project

It is necessary to understand the construction industry to offer a brief and certainly streamlined summary of this business. Obviously this is intended more for the individual that is not on the inside, but the individual that maybe for whatever reason finding it necessary to be presented an outline of the construction industry. You may be considering a residential project, such as a new home, renovation or simple addition, you may need to perform interior fit up work or are considering the construction of a commercial structure for investment. Whatever the catalyst for additional knowledge of the construction industry I offer the following summary. Although 40 years of experience and involvement has probably tainted my opinions and comments I hope that this summary does not “ totally “ expose my true feelings for the industry.

Only kidding, hope this helps!

• A job is obtained by estimating and knowledge. This job could be competitively bid or negotiated, whichever opportunity allows the project to become yours as the contractor. If estimated, hopefully there is some balance between accuracy, knowledge and luck. To start off, you need the project. For the owner, you must understand that there are contractors that will do almost anything to secure the work. This must be understood by all parties to allow an honest and proper understanding of the industry.
• Once a project is won, and dependent upon the project size and the skill of the players, a project manager is assigned, a super and maybe an assistant project manager. These individuals will be the owner’s primary contacts and will be involved, hopefully, throughout the project.
• The management team buys out the project. This means that the project manager with the help of the assistant project manager solicit bids from subcontractors, or negotiate with the subs that have already issued quotes for the project, during the bidding stages. Common sense tells you that to negotiate and eventually award a project to one of your bidders is the better and more political way of buying out the project. If your bidders are caring and disciplined enough to bid the project, they should understand that they will be rewarded with the opportunity to actually perform the work. So the buyout begins, negotiations occur, and the project is bought out. This buyout procedure is independent of the owner and if the contract is a lump sum, then the profits gained by this buyout become the contractors and not the owner. If the contract is a cost plus contract where the owner shares in the actual buyout, then either 100% of the buyout or a contractually agreed upon, other percentage becomes the owners. This percentage split of the savings is a contractual negotiated element of the construction contract and is finalized between the contractor and the owner prior to the commencement of the project.
• Contracts, purchase orders are issued by the project manager (dependent upon the job size and the current responsibilities of the project manager, with the help of the assistant if there is need for one) and normally entered into the contractor’s software program. The computer systems have become extremely convoluted due to sales and propaganda, however, the values of the purchase orders and the contracts, one way or the other, need to be organized and properly logged into the system. In days gone by, it was by simple pencil entry, now it is on the spreadsheets of whatever system you have decided to purchase, or whatever system has the best sales person at the time. Unfortunately as an aside, sometimes the most accurate and sensible software is not chosen simply because of inexperience and lack of actual construction knowledge. I have been involved with several construction companies where the reality of why they need or even have a computer system is totally lost on all the “ bells and whistles” . This is why on constantly stress the use of a professional construction consultant to assist in the decision to invest in a software system for the business.
• The superintendent, while the buyout is occurring, is preparing the actual site for commencement of work. He should be responsible for the set up of the trailers, if required, the layout of the site, the fencing and erosion controls, the temporary utilities, etc. The superintendent should be accountable for the entire site set up required to properly and efficiently commence work.
• Immediately upon issuance of the final contracts, the permits, the insurance, as well as the detailed development of the construction schedule (this is a joint effort of both the project manager and the superintendent) the work commences.
• Prior to the actual commencement of the work in the field, there are a few important issues that must be ensured. All the subcontractors on the project MUST have an updated insurance certificates on file, as well as their legal name, license number and OSHA required certificates. Each project is different and unique, however these items are the minimum, there also could be minority status, bonds, special licenses, etc required. The legal responsibilities for all contractors on the site are extremely important, failure to have all your ducks in a row, if there is a problem, can be disastrous.
• The superintendent is now responsible and accountable for the actual construction on the project. He is responsible for detailed and accurate daily reports, field coordination, field safety, and attends the weekly job meetings for coordination and communication. The super is accountable for the field activities. He is responsible to communicate with the project manager regarding additional work, contract issues, field work tickets, visitors to the site, field discrepancies, etc. He is the man in the field and accountable for his actions, time and decisions.
• The project manager together with his assistant is responsible for the contracts, purchase orders, submittals, approvals, communication, and change orders, requests for information, job meetings and overall management of the project. Is the project manager the so called boss of the super?? Years ago this determination was more clearly identified and in the majority of cases the answer was YES, however nowadays, this determination has been somewhat clouded by politics, experience, knowledge, etc. I have worked for companies where the founder was a superintendent. In these situations, the superintendent became more important and accountable, so it depends on the circumstances of the company. In any case, the efforts of the project manger, the assistant project manager, and the superintendent, all must work in conjunction with one another, as a team, and not in conflict with one another.
• So the project moves on, it goes through all the gyrations of a construction project, disputes, changes, delays, acceleration, field conditions, communications, cost reports and finally the punchlist activities. Once the project has obtained, punchlist status, the end is near and finalization of the paperwork, the agreements, the change orders and all the loose ends must be all tied together and completed.
• The actual body of the construction project ( period of time it takes to complete the work ) is basically the same on all projects. The actual deviations between each project are the numerous issues that develop due to personalities and various different company objectives. I have been involved with so many different types of construction projects that you quickly realize that the most difficult of the issues, is not the construction, that is the easy part, it is the interaction of the individuals involved as well as the “ real “ objectives of the various professional parties.

And that is about it.

Of course there will always be the special and specific project issues, the communication issues, the personalities or the players, the variance in the subs performance and the differing conflicts and issues that would normally come up on a project of any sort. The construction project has many issues and many varied problems and situations, this is why it never becomes boring or stagnant.

We have summarized the basics of a normal everyday construction project, following the everyday rules which have gone on forever; construction projects will continue to follow the same basic outline for the foreseeable future.

Unfortunately, there are difficulties that affect the construction process caused by outside influences;

• Reluctance by individuals to learn how to build, prior to becoming the “ boss” This has become a very difficult process for the generations still learning the business. It is difficult to make construction decisions and interpretations accurate and knowledgeable when individuals fail to put in the necessary “hands on time “to clearly understand the process.
• Political agendas that drive individuals to make decisions that are not in line with normal everyday construction decisions as well as practical methods of problem solving.
• Political objectives that artificially mandate certain specific performance percentages or minority requirements.
• Seemingly clever ideals of individuals that would benefit if the project is delayed, runs over budget or simply does not flow efficiently and cleanly. There are a lot of agendas that negatively influence the construction process.
• Personal relationships that complicate the simple essence of managing and supervising a construction project.
• Incompetent engineers and architects that do not perform their due diligence in designing and coordinating a project.
• Unscrupulous owners, subcontractors, or other entities that do not contribute to the efficient flow of decision making and general construction activities on the project.
• General influx of what I call “internet knowledge “which is the knowledge gained by the masses by simply “goggling “a topic. This has become a rampant misdirection within the construction industry. Everyone that has a computer knows everything about construction. This will continue to hamper the performance of knowledgeable and experienced tradesmen and professional contractors.

Witness the Newport Mansions, the coliseum in Rome, the pyramids, etc. Construction work has and will be performed forever, until human kind does not exist on the planet. It is NO BIG DEAL!! And it does not take the sharpest pencil in the box to succeed in the business. Simple elements required for construction success;

• Experience
• Knowledge
• Willingness to work
• Lack of ego
• Acceptance of responsibility
• Acceptance of accountability
• Insight and thoughtfulness
• Team effort
• Compromise and integrity
• Diligence to see it through

These are the elements of success in all businesses. Construction is the same, and elements that cause difficulties and problems, are most likely, not construction problems, but more likely societal issues that causes the problem.