Construction Management, 4th Edition
Chapter 1 History and Basic Concepts 1
Bridges and History 1
1.1 Historical Perspective 2
1.2 Great Captains of Construction 3
1.3 Panama Canal 5
1.4 Other Historic Projects 9
1.5 Construction versus Manufacturing Processes 9
1.6 Project Format 11
1.7 Project Development 12
1.8 Construction Technology and Construction Management 13
1.9 Construction Management Is Resource Driven 14
1.10 Construction Industry 14
1.11 Structure of the Construction Industry 15
1.12 Differing Approaches to Industry Breakdown 16
1.13 Management Levels of Construction 16
Chapter 2 Preparing the Bid Package 20
Online Plan Rooms 20
2.1 Project Concept and Need 21
2.2 Establishing Need 22
2.3 Formal Need Evaluation 23
2.4 Conceptual Drawings and Estimates 23
2.5 Preliminary and Detail Design 24
2.6 Notice To Bidders 30
2.7 Bid Package 32
2.8 General Conditions 34
2.9 Supplementary Conditions 37
2.10 Technical Specifications 38
2.11 Addenda 41
2.12 The Estimate and the Decision to Bid 41
2.13 Prequalification 42
2.14 Subcontractor and Vendor Quotations/Contracts 42
2.15 Bid Bond 43
2.16 Performance and Payment Bonds 44
2.17 Cost and Requirements for Bonds 45
Chapter 3 Issues During Construction Phase 48
Project Rework Reduction 48
3.1 Acceptance Period/Withdrawal 49
3.2 Award of Contract/Notice to Proceed 49
3.3 Contract Agreement 50
3.4 Time Extensions 50
3.5 Change Orders 52
3.6 Changed Conditions 52
3.7 Value Engineering 53
3.8 Suspension, Delay, or Interruption 56
3.9 Liquidated Damages 56
3.10 Progress Payments and Retainage 57
3.11 Progress Reporting 58
3.12 Acceptance and Final Payment 58
3.13 Summary 59
Chapter 4 Construction Contracts 62
Web-Based Contracts 62
4.1 Contract Environment 63
4.2 Process of Purchasing Construction 63
4.3 Major Construction Contract Types 65
4.4 Competitively Bid Contracts 65
4.5 Stipulated-Sum Contracts 66
4.6 Unit-Price Contracts 67
4.7 Negotiated Contracts 70
4.8 Project Delivery Methods 72
4.9 Design-Build Contracts 73
4.10 Design-Build in a Consortium Format 74
4.11 Construction Management Contracts 75
4.12 Construction Management At-Risk 76
4.13 Comparing Project Delivery Methods 76
Chapter 5 Legal Structure 79
Joint Venturing 79
5.1 Types of Organization 80
5.2 Legal Structure 80
5.3 Proprietorship 82
5.4 Partnership 82
5.5 Corporation 84
5.6 Comparison of Legal Structures 86
Chapter 6 Impact of Taxes 91
Taxation in Ancient Egypt, Greece, and Rome 91
6.1 Introduction 92
6.2 Why Taxes? 92
6.3 Types of Taxes 93
6.4 Income Tax Systems 93
6.5 Taxation of Businesses 94
6.6 Business Deductions in General 95
6.7 Taxable Income: Individuals 96
6.8 Itemized Deductions, Standard Deductions, and Personal Exemptions 96
6.9 The Tax Significance of Depreciation 97
6.10 Marginal Tax Rates 99
6.11 Tax Credits 100
6.12 Tax Payroll Withholding 101
6.13 Tax Payment Schedules 101
6.14 Marginal, Average, and Effective Tax Rates 102
6.15 Net Operating Losses 102
6.16 Summary 103
Chapter 7 Project Planning
Building Information Modeling 105
7.1 Introduction 106
7.2 Developing the Work Breakdown Structure 108
7.3 A Work Breakdown Example 109
7.4 Work Packages for the Gas Station Project 110
7.5 Determining Sequence of Work Packages 112
7.6 Estimate Development and Cost Control Related to the
Work Breakdown Structure 113
7.7 Role of Code of Accounts 114
7.8 Summary 116
Chapter 8 Project Scheduling 117
Four-Dimensional Modeling 117
8.1 Introduction 118
8.2 Estimating Activity Durations 119
8.3 Bar Charts 120
8.4 Activity Precedence Diagrams 122
8.5 Generalized Relationships 127
8.6 Overview of the Critical Path Method Scheduling Procedure 131
8.7 Forward Pass (Traditional Relationships) 132
8.8 Backward Pass (Traditional Relationships) 133
8.9 Critical Path 135
8.10 Activity Floats 136
8.11 Scheduling the Small Garage Project 138
8.12 Generalized Relationship Scheduling Computations 141
8.13 Working to Calendar Dates 147
8.14 Summary 148
Chapter 9 Scheduling: Program Evaluation and Review Technique Networks and Linear Operations 153
Lean Construction 153
9.1 Introduction 154
9.2 An Example Program Evaluation and Review Technique Network 156
9.3 Program Evaluation and Review Technique Shortcomings 158
9.4 Linear Construction Operations 159
9.5 Production Curves 160
9.6 Line of Balance Concepts 162
9.7 Line of Balance Applied to Construction 165
Chapter 10 The Mathematics of Money 171
Using Life Cycle Cost to Assess Sustainable Construction Costs 171
10.1 Introduction 172
10.2 Interest in Action 173
10.3 Time Value of Money 174
10.4 Interest 174
10.5 Simple and Compound Interest 175
10.6 Nominal and Effective Rate 176
10.7 Equivalence and Minimum Attractive Rate of Return 177
10.8 Discount Rate 178
10.9 Importance of Equivalence 178
10.10 Sunk Costs 178
10.11 Cash Flow Diagrams 179
10.12 Annuities 180
10.13 Conditions for Annuity Calculations 181
10.14 Calculating the Future Value of a Series of Payments 181
10.15 Summary of Equivalence Formulas 183
10.16 Worth Analysis Techniques: An Overview 185
10.17 Present Worth Analysis 186
10.18 Equivalent Annual Worth 187
10.19 Internal Rate of Return 188
10.20 Limitations of the Internal Rate of Return Method 189
10.21 A Practical Example Using Present Worth Analysis 189
10.22 Comparison Using Equivalent Annual Worth 190
10.23 Summing Up 192
Chapter 11 Project Cash Flow 195
Scenario Testing 195
11.1 Cash Flow Projection 196
11.2 Cash Flow to the Contractor 197
11.3 Overdraft Requirements 198
11.4 Comparison of Payment Schemes 199
Chapter 12 Project Funding 207
Build Operate and Transfer (BOT) 207
12.1 Money: A Basic Resource 208
12.2 Construction Financing Process 209
12.3 Long-Term Pro Forma Example 210
12.4 Mortgage Loan Commitment 212
12.5 Construction Loan 213
12.6 Owner Financing Using Bonds 215
Chapter 13. Equipment Ownership 218
Radio Frequency Identification Application in Construction 218
13.1 General 219
13.2 Equipment Owning and Operating Costs 220
13.3 Depreciation of Equipment 221
13.4 Straight-Line Method 223
13.5 Declining Balance 224
13.6 Production Method 226
13.7 Depreciation Based on Current Law 227
13.8 Depreciation Versus Amortization 228
13.9 Interest, Insurance, and Tax Costs 229
13.10 Operating Costs 231
13.11 Overhead and Markup 232
Chapter 14 Equipment Productivity 234
Laser-Based Machine Control 234
14.1 Productivity Concepts 235
14.2 Cycle Time and Power Requirements 237
14.3 Power Available 239
14.4 Usable Power 242
14.5 Equipment Balance 246
14.6 Random Work Task Durations 249
Chapter 15 Construction Labor 253
Biometric Identification Recognition 253
15.1 Labor Resource 254
15.2 Short History of Labor Organizations 254
15.3 Early Labor Legislation 255
15.4 Norris-LaGuardia Act 256
15.5 Davis–Bacon Act 257
15.6 National Labor Relations Act 257
15.7 Fair Labor Standards Act 258
15.8 Union Growth 259
15.9 Labor Management Relations Act 259
15.10 Other Labor Legislation 262
15.11 Vertical Versus Horizontal Labor Organization Structure 263
15.12 Jurisdictional Disputes 263
15.13 Union Structure 265
15.14 National Unions 266
15.15 State Federations and City Centrals 267
15.16 Union Locals 267
15.17 Union Hiring Halls 268
15.18 Secondary Boycotts 268
15.19 Open-Shop and Double-Breasted Operations 270
15.20 Labor Agreements 270
15.21 Labor Costs 271
15.22 Average Hourly Cost Calculation 275
Chapter 16 Estimating Process 279
Estimating Using Handheld Devices 279
16.1 Estimating Construction Costs 280
16.2 Types of Estimates 280
16.3 Detailed Estimate Preparation 282
16.4 Definition of Cost Centers 284
16.5 Quantity Takeoff 286
16.6 Methods of Detailed Cost Determination 288
16.7 Problems with Unit-Cost Method 290
16.8 Resource Enumeration 291
16.9 Work Package or Assembly-Based Estimating 294
16.10 Summary 297
Chapter 17 Cost Control 300
Leadership in Energy and Environmental Design Certification 300
17.1 Cost Control as a Management Tool 301
17.2 Project Cost Control Systems 301
17.3 Cost Accounts 302
17.4 Cost Coding Systems 304
17.5 Project Cost Code Structure 304
17.6 Cost Accounts for Integrated Project Management 308
17.7 Earned Value Method 310
17.8 Labor Cost Data Collection 313
17.9 Charges for Indirect and Overhead Expense 316
17.10 Project Indirect Costs 317
17.11 Fixed Overhead 320
17.12 Considerations in Establishing Fixed Overhead 321
Review Questions and Exercises 322
Chapter 18 Materials Management 325
Fiber Reinforced Polymer Rebar 325
18.1 Material Management Process 326
18.2 The Order 326
18.3 Approval Process 333
18.4 Fabrication and Delivery Process 335
18.5 Installation Process 336
18.6 Material Types 336
Chapter 19 Safety 340
Safety in Trenches 340
19.1 Need for Safe Practice 341
19.2 Humanitarian Concerns 342
19.3 Economic Costs and Benefits 342
19.4 Uninsured Accident Costs 345
19.5 Federal Legislation and Regulation 346
19.6 Occupational Safety and Health Administration Requirements 348
19.7 How the Law Is Applied 348
19.8 Safety Record Keeping 352
19.9 Safety Program 352
Chapter 20 Construction Operations
Appendices 361
Appendix A Typical Considerations Affecting the Decision to Bid 362
Appendix B Performance and Payment Bond 365
Appendix C Standard Form of Agreement Between Owner and Contractor On the Basis of a Stipulated Price 370
Appendix D Standard Form of Agreement Between Owner and Contractor on the Basis of Cost-Plus 383
Appendix E Arrow Notation Scheduling Calculations 397
Appendix F AGC Builders Association of Chicago: Typical Agent Job Descriptions 403
Appendix G Compound Interest Tables 409
Appendix H Plans for Small Gas Station 435
Appendix I Site Reconnaissance Checklist 438
Appendix J The Cumulative Normal Distribution Function 440
Appendix K WebCYCLONE Users Manual
