Construction Management / What is it?
I was questioned regarding the term Construction Management and what it meant?
There was a period of time, where the process of Construction Management was the preferred method of constructing a project. The industry had moved through a period of difficulty, caused by various aspects and developments within the construction industry. The following developments had occurred and shifted the methodology of the industry, from competitive bidding to Construction Management.
- Technology and construction processes were becoming more advanced, and much more creative. New materials, with new and unknown characteristics were being introduced into the industry at an alarming rate, and the misuse of the new materials was becoming rampant. Problems were starting to occur due to lack of proper submittals, lack of proper engineering coordination and simply, lack of proper management.
- The financial means of developers and owners was growing, and the ability to finance larger and larger projects was becoming routine. The number of construction companies that were financially capable and properly equipped to perform these large projects was minimal. The ability to find qualified contractors to actually bid these large and complex problems was a problem unto itself.
- Unions had become a very powerful factor in the industry, and the entry of non-union contractors was causing safety and supervision issues on projects. Legal and political issues started to be addressed in the field on construction projects. The need for more sophisticated and educated management teams were required to properly address these negative developments. These qualities were not readily available within the limited number of general contractors capable of bidding on these projects.
- Time became an important concern for all project owners and developers. The requirement to overlap design, engineering and construction was being considered to expedite the activities on these construction projects. It was becoming important that the sitework was occurring as the concrete design was being developed. The structural steel needed to be designed as the concrete foundations were being placed, there was the need to overlap and not allow a simple lineal progression of work activities. This type of overlap required substantial management expertise. The normal, everyday, general contractor did not have these qualifications.
- Computers were starting to appear in the offices of general contractors and these pieces of equipment were allowing a more technical and definitive means for documentation and management. The ability to properly document and manage projects was enhanced by the use of these new pieces of equipment. But do not expect the normal, everyday general contractor to have any idea how to turn the machine on.
- Public work was flourishing, and the need for proper management and documentation was causing difficulties for small and less financially capable contractors to respond. Paperwork was becoming more intense and the need to document, document and have more documentation was becoming overwhelming. The projects now required Certified Payrolls, OSHA reporting, monthly lien waivers, etc.
- Time became more important than the money expended on the project, and the need to overlap responsibilities and create avenues of efficiency throughout the project, became the ultimate in importance. Time was all important!
The most important development in the construction industry was the attitude of the engineers, architects and contractors. The contractors were starting to assume a more leadership role on projects. They were being presented with more responsibility on the projects and the architects and engineers were starting to simply work for the owner in a minimal fashion, to provide construction documents.
The term Construction Manager was established to identify the contractor that was now more or less responsible for the management and direction of the project, in many cases, from the development of the idea for the project all the way to the completion of the punchlist on the project. This total involvement and responsibility shifted the leadership roles, and supported a different type of contractual relationship between the owner and the contractor.
The term partner was thrown around, and the liberal and democratic ideology of working together and supporting one another was introduced.
All parties working as a team, for the mutual benefit of constructing a successful project!!
This was the development of the Construction Management method of building a project.
Of course, as with all newly established methods of management, the ideals of the process, far exceeded the actual benefits afforded the owners and the developers of the projects. As with all team processes, there were substantial benefits, as well as substantial shortfalls. As long as the financial health of the industry remained strong, the methods of Construction Management were allowed to flourish and develop. However, once the money started to tighten up, and contractors started to understand that money was all that mattered to the owners and developers, the use of the Construction Management system of building a project weakened. There was an influx of competitive bidding projects, more cut throat attempts to secure work, and the general impression by competitive and aggressive general contractors, that they could make much more money, if they were simply the old fashion general contractor.
Why could these individual contractors make more money?
- They were able to add a substantially greater profit on the bottom line of the project, if they wanted to. Yes they had to make sure they remained competitive, and in many cases the lowest bid on the project, however, if they sensed an angle, such as incorrect documents, mistakes in the specifications and basic avenues for additional work and claims, they could make much more money on the project. Remember, the ability to make as much in the shortest period of time is the ultimate goal, not the creation of a team working towards a common goal, this concept had already become extremely old!
- The selection of subcontractors was totally the responsibility of the general contractor. This allowed the coercion of subcontractors to absorb other problems that had occurred on past projects, as well as develop a more incestuous relationship with the general contractor. All general contractors prefer to create a financial means of controlling their subcontractors. Being awarded the project as a general contractor allowed this to occur.
- Total control of the project, without the interference of the “team “which had included the architect, the engineer, etc. Contractors are not interested in being a member of the team, especially if the financial ability of the owner to pay, is compromised or diluted by too many members of the team.
- Ability to blame the architect and engineer for mistakes as well as lack of proper details on the drawings. It is much easier to blame, than to manage and coordinate. Look at the opposing political party in government, the minority only has to complain and accuse, the majority party has to actually accomplish something. Much easier to complain and caste dispersion. If you are not involved, you can‘t be blamed.
- As general contractor you are in a very important and powerful The general contractor controlled not only the work, but the payments to subcontractors, suppliers, etc. Control of the money provides power, and the majority of general contractors enjoy making money.
The transition back to the competitive bid method of construction was so obvious, that anyone in the industry knew when it occurred and why it occurred. Financial greed caused the shift from a working team to a competitive boxing match. The general contractors loved to box and certainly were not proficient at management, or team-play.
We are now in the re-engagement period of Construction Management within the industry. There are many more projects being introduced as Construction Management projects and not competitive bid projects. The financial climate is becoming stronger, and the need to overlap design and construction is once again finding traction. The industry is starting to shift back to the Construction Management style of project building, however, beware, because greed has NOT disappeared. We will swing back, just give it time.
Of course, I do need to end this page by indicating that the ability to ensure any lack of responsibility has now entered the Construction Management methods of building a project. The legal use of clauses that will ensure no responsibility, is amazing, and we have now witnessed the growth of an entire generation of project managers and superintendents, that are more proficient at keeping any semblance of responsibility off their backs, and are more expert at deflecting any type of liability from landing on their shoulders than understanding how the building goes together!
How this industry will continue, is beyond my scope of responsibility? I only explain it! Good luck!