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Another Brick in the Wall Understanding Construction Management

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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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slide1

Another Brick in the Wall

Understanding Construction Management

By:

John Knox, Vice President

The Chamberlain Companies

presentation process
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
construction management
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.

construction management cm
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
stipulated sum vs open book
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
construction divisions
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
slide7
So, While there is no difference in Construction Means and Methods

The difference lies in ..

  • Philosophy
  • Contract
  • Control
philosophy cm
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
philosophy gc
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
general contracting
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
construction management11
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
construction management by architect

Contract

Control

Construction Management by Architect

Chamberlain regularly

performs both roles –

Architect and

Construction Manager

greatest risks on a construction project are
Greatest Risks on aConstruction Project are …
  • Unknown conditions
  • Facility not meeting expectations
  • Bankruptcy of Constructor
  • Exceeding the budget or schedule
  • Inclement weather
client concerns
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
slide15

Risk is Minimized by Maximizing Control and Flexibilityduring the Construction Process

control
Control
  • Owner contracts and is dealing directly with the Trade Contractors
  • He who pays the piper calls the tune
flexibility
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
reality of stipulated sum contracts
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
the bottom line
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.

value
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

challenges of construction management
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
projects built under construction management
Projects built under Construction Management

Canadian Warplane Heritage Museum

Air Traffic Control Tower, Toronto Pearson Int’l Airport

slide24

Lincoln Public Library, Rittenhouse Branch

Shelburne Public Library Addition & Restoration

slide25

Niagara-on-the-Lake

Public Library

slide26

Quinte West

City Hall/

Public Library

wrap up
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
slide30

Another Brick in the Wall

Understanding Construction Management

By:

John Knox, Vice President

The Chamberlain Companies

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