Chapter 2  Approve payments

Construction Industry is an industry which is involved in the  Resolve contractual disputes

planning, execution and evaluation (Monitoring) of all types of civil  Issue provisional and final acceptance certification
works. 3. The Contractor – the one who constructs
Physical infrastructures such as
 Submit tender
 Building,
 Communication and  Control project program & cost,
 Energy related construction works  Notify the consultant about delays, discrepancies,
 The Construction Industry can be categorized into three  Effect all payments to his employees, suppliers,
major sectors; subcontractors, etc
a) Transport and Communication  Rectify all defects on completion of works,
b) Water and Energy Works; and  Provide post occupancy repair & maintenance if required,
c) Buildings and Other Physical Infrastructures. Resources for the Construction Industry
Nature of the Industry 1. Human Resources / Labor or Workmen
Most important enablers for social, economic and political 2. Financial Resources / Fund
development of countries. Specifically this fact is strengthened in 3. Information Resources
the case of least developing countries like Ethiopia. 4. Physical Resources such as Materials, Equipment and
Construction Industry is unique from the other industries
Other Assets
i. Fragmented Industry
ii. Long Production Cycle 5. Services and Management.
iii. Transient Organization Nature 1. Human Resources / Labor or Workmen
iv. Unpredictable Work Load Very necessary for the successful accomplishment of a project, the
v. Subject to Environmental Impact Availability of workmen from the top management including
Role of Construction Industry in the National Economy project manager to the daily laborer
 The construction industry plays an important role in the  Staff level is very vital. These include professional, skilled,
economy, and the activities of the industry are also vital to the
semi-skilled and unskilled laborers.
achievement of national socio-economic development goals of
providing shelter, infrastructure and employment. If an organization needs to successfully accomplish project
Main Parties in the Construction Industry objectives. They do need also be capable of:
1. The Client: The client is the initiator and owner of the project  Communication – Inter - personal, group interaction – skills
2. The consultant: The consultant transfers the wish of the  Problem solving / Conflict resolution / Negotiation Skills
owner into realizable form and makes the study, design and  Facilitating / Decision – making Skills
possibly the supervision.
 Writing skills for Proposals / Reports / ToRs / MoUs; and
3. The Contractor: The contractor is the one who performs the
work.  Hard Skills-Planning, Implementing, Leading and monitoring
4. Insurance Companies: provide bid bonds, performance and tools.
payment bonds, and they also service the liability and property 2. Financial Resources / FUND: It is the basic resources in
insurance needs of contractors. the construction industry is Fund. The project to be
5. Banks: Banks provide the working capital contractors need to conceived shall be within the fund available for it.
build the project & bonds for bid and performance.
3. Information Resources: Information can be understood in
6. Suppliers: The quality of a construction project is very
dependent on the quality of the suppliers. two terms: data whether processed or not; and its
7. Public: The public is impacted by every construction activity. technology. Both are vital for the successful
Either good or bad. implementation of projects.
8. Permitting Agencies: represent the interests of public safety 4. Physical Resources: The very large portion of a project
Responsibilities of main parties (firms) cost is gone to material cost.
1. The client – the initiator As the material cost component of the construction industry covers
 Demand for the product between 55-70% of the total construction cost.
 Availability and cost of land 5. Services and Management.
 Site preparation (right of way) SERVICES: Services such as acquisition of land, provisions of water
 Permits supply, electric power, communication systems, etc.
2. The consultant – the professional advises MANAGEMENT: Management has come to employ a disciplined
 To interpret the client’s project requirements into a specific approach to the use of available resources.
design.
 The consultants’ team shall
 Assess client’s cost limit to decide on materials & the like.
 Prepare contract documents.
 Supervise the project and constantly inform the client on the
progress
Chapter one
INTRODUCTION TO MANAGMENT
Management is one of the most important human activities.
Management is essential whenever human efforts are to be
undertaken collectively to achieve specific goals.
Management is the process of running an organization (planning,
organizing, staffing, directing/leading and controlling).
Management is a body of knowledge, a discipline.
General Management as a practice is as old as the human
civilization but management as a theory is the result of the
industrialization in the 20th century.
Construction Management is a task which involves the planning,
execution, and control of construction operations at the same time
meeting the cost, quality and completion date objectives of the
project
 The three stages of project management are: planning,
scheduling and controlling
1. Planning - goal setting, project definition, team
organization. Planning horizon covers project duration.
This is carried out before construction operations begin.
2. Scheduling - relating people, money, and supplies to
specific activities and activities to one and other. This is
detailed action plan with days to weeks’ time duration for
actual execution of construction activities. It begins before
project begins and continues until project is completed.
3. Controlling - monitoring resources, costs, quality, and
budgets; revising plans and shifting resources to meet
time and cost demands
Duties of project manager
¨ Maintenance of contact with clients
¨ Allocation of workforce to projects and organization of
units for project operation
¨ Coordination of the work of all units and divisions
¨ Periodic review and analysis of project costs, schedule,
progress, and other construction data
¨ Purchasing
¨ Arranging for surveys and construction layout
¨ Instituting and supervising job safety programs
¨ Securing permits from government agencies
¨ Maintenance of files of labor agreements
Evolution of Management Theory
 Frederick W. Taylor (1856-1915)
 Frank (1868-1924); Lillian (1878-1972)
 W. Edwards Deming (1900-1993)
 List advantages and disadvantages of project management.
Advantages of project management are:
 The work Can happen in the shortest possible time
 The client can concentrate on its area of work buying this
service of construction and its management from a
contracting firm
Disadvantages
 It costs the client
 Contractors sometimes unethically try to compromise
quality to maximize profit so far as they can can the
supervising consultant
 How did construction management evolved?
Answer
It evolved from scientific management up to dynamic engagement
dictated by demands and problems. It evolved through scientific
management, classical school, behavioral school, management
science, systems approach, contingency theory and finally dynamic
engagement.
 Three likely results of poor construction project manager
1. Delay in project completion — profit of the contractor is
eroded and can even result in completing the project at a
loss
2. Cost overrun — disadvantages the client
3. Quality may be compromised that results in rework —
which in turn results in delay of project
 Role of project manager
The Role of the Project Manager. A project manager is a person
who has the overall responsibility for the successful initiation,
planning, design, execution, monitoring, controlling and closure of
a project. ... Most of the issues that impact a project result in one
way or another from risk.
 is expeditor,
 Is a coordinator,
 Can be a pure project or a matrix manager based on type
of project
 What are the different types of project managers?
Depending on the nature and scope of the job managers
 Functional manager
 General manager
 Depends on the project type and capacity
 Would you find all of them in a single organization? Depends
on the project type and capacity