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ISBN: 978-1-94708-328-8
CONSTRUCTION
SITE COORDINATION
AND MANAGEMENT
GUIDE
CONSTRUCTION
SITE COORDINATION
AND MANAGEMENT
GUIDE
A. SAMER EZELDIN AND

AHMED M. ALHADY
MOMENTUM PRESS, LLC, NEW YORK

Copyright © Momentum Press®, LLC, 2018.
All rights reserved. No part of this publication may be reproduced, stored

in a retrieval system, or transmitted in any form or by any means—
electronic, mechanical, photocopy, recording, or any other—except for
brief quotations, not to exceed 400 words, without the prior permission
of the publisher.
First published by Momentum Press®, LLC

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ISBN-13: 978-1-94708-328-8 (print)

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To my family, colleagues, and students.
A. Samer Ezeldin
I dedicate this textbook to my great wife who have shared me every single
moment and supported me from the commencement of w orking in this
textbook. I also dedicate this effort to my sweet son and daughter hoping
to be as an inspiration for them throughout their future life. A special
dedication is due also to my lovely p arents, brother, and sister for their
ever-lasting valued support and encouragement.
Ahmed M. Alhady
Abstract
Site Coordination and Management Guide covers key project manage-

ment concepts described by the Project Management Institute (PMI) and
explains how they can be applied to construction site coordination and
management. It provides professionals involved in construction with the
knowledge they need to manage construction sites effectively.
The book provides construction practitioners with the knowledge they
need to successfully coordinate and manage construction projects. It high-
lights different construction processes required to enhance their practical
performance in particular and further the construction industry in g eneral.
The topics highlighted in this book through the introduced seven chapters
are for example, but not limited to, causes leading to poor site coordi-
nation, duties of a construction manager, important versus time-consum-
ing coordination activities, temporary facilities and controls, developing
the construction strategy, developing the performance management pro-
cess, forms of procurement and contracts, variations and change orders,
anti-dispute coordination, governing laws, how to review/coordinate
design documents, how to review the construction plans, cost and risk
management, quality and safety management, meeting management/coor-
dination, submittal administration (shop drawings, samples, etc.), report
preparation, data/document/transmittal circulation, preparation of close-
out documents, and project record documents.
KEYWORDS
construction communications management, construction site coordina-

tion, construction strategies, contract management, cost management,
project management, quality management, review construction plans, risk
management, safety management
Contents
List of Figures xi
List of Tables xiii
1 Site Coordination Overview 1
1.1 Introduction 1
1.2 Causes Leading to Unsuccessful Site Coordination 1
1.3 Important Versus Time-Consuming Coordination Activities 4
1.4 Duties and Responsibilities 9
1.5 Temporary Facilities and Controls 21
2 Developing Construction Strategies 31
2.1 Introduction 31
2.2 What Is Strategy? 31
2.3 The Importance of Strategy 31
2.4 Project and Technical Strategies 33
2.5 Producing and Selecting the Appropriate Strategy 34
2.6 Employing a Performance Management Process 40
3 Construction Design and Plan Review 47
3.1 Introduction 47
3.2 Construction Design 48
3.3 Construction Plan 54
4 Contracting and Procurement 61
4.1 Introduction 61
4.2 Contract Definition 61
4.3 Deciding on Contract Type 63
4.4 Project Delivery Methods 64
4.5 Types of Contracts 68
4.6 Contract Administration 72
4.7 Selection of a Contractor 78
4.8 Subcontracting 79
x • Contents
4.9 Governing Law Clauses 79

4.10 Construction Change Order and Variation 83
4.11 Anti-Dispute Arrangements 84
5 Cost and Risk Management 87
5.1 Introduction 87
5.2 Cost Management 88
5.3 Risk Management 111
6 Quality and Safety Management 119
6.1 Introduction 119
6.2 Quality Management for Construction Projects 119
6.3 Safety Management for Construction Projects 128
7 Communication Management 141
7.1 Introduction 141
7.2 Construction Meetings 142
7.3 Review of Contractor Submittals 142
7.4 Project Recordkeeping and Documentation 144
Bibliography 151
Index 155
List of Figures
Figure 1.1. Sample of a responsibilities matrix among

project parties. 21
Figure 4.1. Steps of contracting process. 62
Figure 4.2. Contractual relationships. 69
Figure 4.3. Level of risk associated with various contracts. 71
Figure 5.1. Cost estimate stages. 89
Figure 5.2. Level of accurateness of cost estimates. 94
Figure 5.3. Schematic diagram of the structure of tender price. 96
Figure 5.4. Project cost and expense curves. 100
Figure 5.5. A sample S curve. 100
Figure 5.6. Example of the S curve of cash in for a project. 101
Figure 5.7. Project revenue and income curves. 102
Figure 5.8. Cash flow according to monthly payments. 103
Figure 5.9. Effect of advance payment on improving cash flow. 103
Figure 5.10. Effect of receiving two payments on cash flow. 104
Figure 5.11. Planned versus actual progress over time on a project. 107
Figure 5.12. Earned value measures and indicators. 109
Figure 5.13. Risk analysis in construction projects. 112
Figure 5.14. Risk factors’ short list. 116
Figure 5.15. Severity matrix. 117
Figure 5.16. Probability impact matrix. 117
Figure 5.17. The risk analysis simulation process using Crystal
Ball software. 118
List of Tables
Table 1.1. Common site coordination issues 2

Table 1.2. Causes of site coordination problems 3
Table 2.1. Priority matrix of four strategies with row 1 filled in 35
Table 2.2. Priority matrix with row 2 and column 1 filled in 36
Table 2.3. Priority matrix with all entries filled in 36
Table 2.4. Priority matrix with totals and ranks filled in 37
Table 2.5. Matrix with votes tallied for Strategy 1 versus Strategy 2 37
Table 2.6. Matrix completely filled in and totaled 37
Table 5.1. Accurateness of different types of cost estimate 94
Table 5.2. Steps for developing a detailed cost estimate 97
Table 5.3. EV information 110
Table 6.1. Safety plan versus Method statements on safety 129
Table 6.2. Roles and responsibilities of project stakeholders 130
CHAPTER 1
Site Coordination Overview
1.1 INTRODUCTION
Coordination is an essential function in the building procedure. Recent

research has demonstrated that poor or inadequate coordination is the best
that is accomplished on construction sites. Nevertheless, not many writ-
ers of construction project management have examined this essential sub-
ject. Literature reviews carried out on this subject revealed that there is an
absence of formal comprehension on how everyday coordination is really
accomplished on a construction project.
Coordination can be viewed as a procedure of overseeing assets in
a balanced way so that a higher level of operational effectiveness can be
accomplished for a given project. Between the underlying goal and the
reality on the ground exist a huge number of conditions that can affect
the progress of your project and that is the reason a dynamic ramification
amid the development time frame is significant. Successful project coordi-
nation permits the global vision of the project and the customer’s interests
to remain intact. This chapter addresses the causes of poor construction
site coordination considering the various types of coordination activities,
the roles/duties of construction engineers and managers, and ends with an
overview of the site’s temporary facilities and controls.
1.2 CAUSES LEADING TO UNSUCCESSFUL SITE

COORDINATION
It is a typical practice for primary contractors executing projects to assign

the vast majority of the work to subcontractors. Yet, one of the greatest
gripes of subcontractors is that they can’t perform to their full potential
because of poor coordination and site management. Eighteen common site
coordination issues and 16 basic reasons for these issues were identified
from the literature and recommendations of industrial experts. The causes
2 • CONSTRUCTION SITE COORDINATION AND MANAGEMENT
were grouped into three classifications: staffing-related causes; technical-

related causes; and management system related causes. The reasons for
the poor quality of primary contractors’ coordination through the con-
struction stage were addressed through a questionnaire survey conducted
in the literature. Vague employment obligations were observed to be the
most critical cause. The results of the survey revealed that the most critical
causes were essentially associated with management systems, particularly
communication, rather than staffing- or technical-related variables.
The typical site issues and the basic reasons for these issues were
shortlisted by studying the literature for the factors influencing the produc-
tivity at the worksite level and the observation of common practices and
recommendations of industrial experts.
1.2.1 TYPICAL SITE COORDINATION PROBLEMS
Eighteen basic site coordination issues were identified and they were
classified into the following eight groups according to their nature as
shown in Table 1.1.
Table 1.1. Common site coordination issues

No. Group Problems
1 Construction a. Data not detailed enough
information b. Vague or contradictory data
2 Working plan a. Working plan not detailed enough
b. Working sequence not practical
c. Short notice for commencing site work
d. Late change of working plan
3 Preparation for a. Workplace environment not yet
workplace prepared, such as general site
arrangements, ventilation, and lighting
b. Insufficient or inadequate site reference
points
c. Insufficient or inadequate temporary
work support such as scaffolding, and
water and power supply
4 Interfacing a. Work not yet accomplished
work to be b. Work not precisely completed
completed by other
subcontractors
Site Coordination Overview • 3
5 Access to worksite a. Access road not yet ready

b. Access routing not appropriate
6 Equipment a. Delay in providing equipment support
provision b. Type of equipment provided is
inappropriate
7 Material provision a. Inadequate quantity
b. Type of material provided inappropriate
8 Response to site a. Delayed response to site issues
problem b. Solution suggested not applicable
1.2.2 CAUSES OF SITE COORDINATION PROBLEMS
Sixteen essential causes leading to the common site coordination issues

identified were summarized and grouped into three categories as shown
in Table 1.2.
Table 1.2. Causes of site coordination problems

No. Category Causes
1. Technical a. Inadequate technical support from main office
b. Poor temporary work design
c. Inadequate site office space
d. Impractical site layout
e. Poor project plan or phasing of work
2. Management a. Vague job duties
system b. Vague communication procedures
c. Inadequate supervision of frontline staff
d. Vague accountability system
e. Excessive paper work
3. Staffing a. Staff inexperienced to manage the technical
administration work
b. Numerous changes of personnel
c. Staff inexperienced to manage the site work
d. Insufficient directly employed workers to
execute the temporary work
e. Insufficient staff to coordinate the site work
f. Insufficient staff to coordinate the technical
administration work
• Technical-Related Causes
The term technology is defined as how an association moves its
contributions to products. As the role of primary contractors has
officially changed from that of constructors to supervisors of
subcontractors of construction projects, they should have the

required ability to provide vital help to subcontractors to perform
productively and adequately.
• Management System–Related Causes
The responsibilities and obligations of every individual of the
project team should be properly defined to guarantee that the
activities continue with no problems. Throughout the process of a
project development, a dynamic temporary multiorganization sys-
tem is created that has to constantly deal with incongruities between
two levels of targets, the short-term objectives of the construction
project and the long-term goals of the organization and operation
of the project. Primary contractors need to set up dynamic manage-
ment systems that enhance the coordination of activities and con-
trol the actions of their individuals.
• Staffing-Related Causes
There is no guarantee for the success of a project even if primary
contractors can set up an efficient management system to meet
the requirements of the project. Contractors need to allocate suffi-
cient staff with important specialized knowledge and experience to
properly operate the management system.
 According to literature and expert opinion, it is recommended
that main contractors should focus their efforts in the manage-

ment systems, especially communication, in order to develop
more efficient and effective site coordination that should lead
to improved subcontractor performance in the construction
projects.
1.3 IMPORTANT VERSUS TIME-CONSUMING

COORDINATION ACTIVITIES
In 1916, Henri Fayol, the first to list the standards of administration, recog-
nized coordination as an imperative managerial action. He opined that the
best contact officer would be the general manager consulting every single
departmental head in turn. Nevertheless, Chitkara (1998) stated that coor-
dination won’t be required. If the circumstance factors are quantifiable, the
strategies and the systems are very much characterized, and communica-
tion streams easily in all directions, then esprit de corps wins, everybody
is responsible for his or her job, and all work cooperatively to accomplish
a definitive project objective in a rapidly changing project condition. Such
a perfect domain, however, is rarely seen in construction projects. Coordi-
nation is fundamental both inside and among different departments to fill
the gaps created by changing circumstances in the frameworks/systems,
procedures, and strategies. In the construction industry, the pivotal issue
of coordination emerged from the way that the fundamental relationship
between the parties of a construction project has the character of a reliant
self-governance. There is a mismatch between the technical interdepen-
dence of the work and the organizational independence of those who con-
trol the work. For over three centuries, the construction industry has been
attempting to reconcile this technical interdependence and organizational
independence.
Coordination is a standout among the tangible functions of man-
agement. In the building process, we can recognize three fundamental
functions. Two are self-evident: design and construction. The third is
coordination; it is not so clear due to the very low tangibility of both the
coordination processes and their products/results. It might be because of
this intangibility that many writers of construction project management
have not discussed this crucial theme adequately. Despite the fact that
authors address coordination, they miss to recognize identifying those
activities a construction project coordinator needs to perform to accom-
plish proper coordination.
Another conceivable explanation behind the failure to address coordi-
nation is that coordination in the construction industry is carried out quite
casually. The forms and/or types of control are drawn from watching the
building team at work and talking with them about what they are doing.
The vast majority of these activities are done deliberately and all individ-
uals from the building team realize this. These activities are, nevertheless,
casual in that they are not discussed on records, nor do they show up in
the handbooks or formal reports and literature of the industry except as
measures to be avoided. So in order to fulfill this need to clarify the con-
struction coordination procedures, some reviews were conducted to deter-
mine industry professionals’ views on what the most essential and most
time-consuming coordination activities are.
From the literature and expert opinion, it was possible for the authors
to comprehend that all the coordination activities can be recognized under
just five groups with their aggregate of 64 subactivities:
• Provision of leadership
1. Identifying strategic activities and possible delays

2. Translating documents into task assignments
3. Identifying technical and workforce requirements
4. Resolution of conflicts and confusions among stakeholders
5. Delegation of work
6. Monitoring the delegated work
7. Motivation
8. Development of a team spirit
9. Communication with other departments and managers in the same
organization and outside the project team
10. Keeping proper and professional relationships with client, consul-
tants, and the contractor
11. Getting constructive input from all contributors in the project
12. Establishing and maintaining an effective organizational structure
and communication channels
13. Establishing a project quality plan (PQP)
14. Preparation of coordination drawings
• Facilitation
1. Provision of organized tools for gathering and compiling

information
2. Compilation of information per requirements of all parties and
merging all for use in planning
3. Management of contractual matters
4. Interpretation of all contractual obligations and documents
5. Approving detailed methods of construction
6. Integration of the work on different subsystems
7. Analyzing the project performance on time, cost, and quality,
detecting variances from the schedule, and dealing with their effects
with regard to time, resources, and other constraints
8. Consideration of better alternatives that may efficiently meet the
project objectives
9. Estimation of required resources
10. Coordination of off-site manufactures and their delivery with
on-site activities
11. Coordination and rescheduling the sequence of activities on-site
12. Coordination of the acquisitions, delivery, and storage of different
resources
13. Providing own crews and subcontractors with tools, equipment,

and required resources
14. Optimization of resource allocation and utilization
15. Explaining and supporting the subcontractors in their tasks
16. Identification and resolution of deficiencies, ambiguities, and con-
flicts in drawings and specifications
17. Getting further drawings, specifications, and technical details on
time for implementation
18. Identification and compilation of information on building work
requirements (insulation, openings, etc.) of all relevant parties and
coordinating their implementation
19. Provision of general facilities and tools (storage space, testing
facilities, scaffolding, plant, power, water, illumination, etc.) to
demanding parties
20. Coordination of assignment of work areas (service areas, plant
rooms, service routes, etc.) to other parties
21. Caring for the work of others by making staff and workers aware
(e.g., providing covers, where possible, changing the sequence of
work)
22. Arranging for consistence with site guidelines/orders from the
engineer and revising programs or requesting material accordingly
23. Arranging for convenient completion of all tests or assessments and
endorsement by the engineer
24. In the event of injury or harm, proposing corrective work tech-
niques and measures for execution
25. Submitting material for endorsement by the engineer
26. Facilitating payments to own workers or employees and subcon-
tractors
27. Applying proper technical practices
28. Applying proper administrative procedures and methods
• Controlling
1. Ensuring the timeliness of all work performed

2. Managing the quality of all work being completed
3. Ensuring efficient usage of labor, equipment, and material
4. Managing the health, safety and security, and benefits of employees
5. Managing the maintenance and security of equipment and
machinery
6. Ensuring appropriate and safe conveyance, stockpiling, and treat-
ment of material
7. Monitoring the functioning of each section and department within

the overall project
8. Monitoring the financial plan on all activities and taking corrective
actions
9. Controlling project cash or finances
10. Ensuring self-control among all employees
• Communicating
1. Conducting regular meetings and project reviews

2. Acting as liaison with consultants, assigned subcontractors, and
so on
3. Acting as liaison with the client and the consultants
4. Communicating project progress, financial/commercial status,
schedules, plans, changes, records, documents, and so on, to every
single concerned member
5. Communicating occurrences of poor quality and dangerous or
adverse incidents or situations to concerned or relevant personnel
6. Contacting outside authorities
• Recording
1. Keeping contract documents and amendments to contracts at the

construction office
2. Maintaining records of work done outside the agreement, varia-
tions, day works, and all actualities/relevant information to support
claims
3. Maintaining records of all drawings, data, orders, verbal guidelines,
and archives received from the consultants and client
4. Maintaining records of quantity of work done and details required
for as-built drawings; particularly of the work that is to get con-
cealed or buried.
5. Maintaining records of change in prices, where the agreement
makes additional payments
6. Maintaining records of work and plant deployment, working
conditions (e.g., hostile weather), plant breakdowns, accidents, and
so on
7. Maintaining records of principal conveyances to the site and general
particulars of deficiencies
8. Publishing day-to-day construction reports in the structure or
format required by the engineer
9. Managing designated subcontractors or utilities undertakers

10. Maintaining records of all tests and reviews
In light of the literature, it was endeavored to identify the 64 coordi-

nation activities such that they entirely define the function of construction
coordination. Some of the listed activities tended to have some areas of
intersection. However, the primary intention was to arrive at a comprehen-
sive list of activities required to attain proper construction project coordi-
nation, rather than the activities listed being mutually exclusive.
From the literature and expert opinion, it was identified that the
following are the six most important coordination activities:
1. Identifying strategic activities and possible delays

2. Ensuring the timeliness of all work performed
3. Maintaining records of all drawings, data, orders, verbal guidelines,
and archives received from the consultants and the client
4. Keeping proper and professional relationships with client, consul-
tants, and the contractor
5. Managing the quality of all work being completed
Also, the following six activities appear to consume most of the con-
struction project coordinators’ time:
1. Conducting regular meetings and project reviews

2. Analyzing the project performance on time, cost, and quality, detect-
ing variances from the schedule, and dealing with their effects with
regard to time, resources, and other constraints
3. Compilation of information per requirements of all parties and
merging all for use in planning
4. Interpretation of all contractual obligations and documents
5. Resolution of conflicts and confusion among stakeholders
1.4 DUTIES AND RESPONSIBILITIES
1.4.1 DUTIES OF A CONSTRUCTION ENGINEER
The construction engineer is in charge of the work of construction con-

tractors throughout the execution stage/phase of projects. Activities may
vary in size from minor repairs to building new structure elements. The
construction engineer’s duties and responsibilities are the following:
• Lead the process of “authorization to proceed” for contractors

• Participate in engineering package reviews during the selection,
definition, and execution phases of projects and provide construc-
tive input to the project team
• Retain compliance with the safety assurance plan so that work is
carried out in an environmentally sound manner using safe work
practices
• Conduct safety observations and discussions to assist in accom-
plishing a zero-incident culture
• Provide the off-site project leader and design groups with func-
tional systemization of projects for guidance on certification and
payments
• Support the off-site project leaders throughout project’s phases
• Ensure work is performed per plans and specifications via coordi-
nation with the quality assurance and functional checkout (FCO)
groups
• Anticipate and resolve problems encountered in project’s sites to
eliminate costly rework or retesting
• Coordinate between the construction contractor and the project
lead to resolve field discrepancies in design packages and material
delays
• Encourage construction and operations personnel to review design
packages early in the course of projects to eliminate rework and
optimize construction
• Coordinate with clients to ensure proposed construction and work
methods are clearly understood and accepted and ensure agreement
on environmental and safety work plans
• Provide input into the scheduling of projects to meet the client’s
required deadline and maintain construction resources at accept-
able levels
• Monitor progress to ensure scheduling milestones are understood
and are being met
• Ensure equipment and manpower resources are being used
efficiently
• Review contractor work performance and project status updates
• Ensure that the process of safety management and management
of change requirements regarding field design modifications and
scope changes are met by forwarding appropriate documentation to

the project leader for processing
 Contribute in a post-project appraisal review and report (lessons
learned)
 Coordinate project turnover activities with the commissioning
engineer and quality assurance/quality control and FCO groups

• Contribute in the management of the process of controlling change
• Administer project’s management-of-no-change process for scope,
schedule, and budget impacts for client approval
• Arrange with various client departments to ensure all appropriate
permits and regulations are followed
 Review and approve procurement plans and contractor invoices
and timesheets
 Manage schedules for vendor representatives
• Deliverables: Work deliverables are items considered necessary to

manage and control project streaming. These deliverables include,
but are not limited to, the following:
 Coordinate solutions between the construction contractor and
the project lead to address discrepancies in design packages and

material delays
 Convey status reports as requested to the project leads
 Create and submit weekly site narratives to the construction
manager
 Complete the construction segment of the project on schedule,
within the budget, and meeting safety and quality requirements

 Document safety observations
 Develop plans for construction contractor’s tasks with ongoing
operations
 Develop construction plans to be provided to the project lead
for integration into the project execution plan
1.4.2 DUTIES OF A CONSTRUCTION MANAGER
The meaning of the terms “project manager” and “construction manager”

differs for different projects in different countries. In this context, either
term can be used and it refers to the manager who is accountable for a
project on behalf of the employer. The project will include one or more
construction contracts. FIDIC offers two cases on the question of the role
of a construction manager in a construction contract.
1.4.2.1 General Cases on the Use of FIDIC
These cases are based on literature and expertise. They are based on lim-
ited exposure to the subject and anyone who is involved in the construction
industry should be able to develop the theme and provide further examples.
• Separate control of design and progress

On some construction projects, the supervision of design/quality
has been isolated from the supervision of progress payment within
a solitary construction contract. The progress payment is specifi-
cally controlled by the construction/project manager. This might
be to suit the requirements of a project, or sometimes because the
organization that the employer/owner has appointed to control the
overall project is not capable of managing the design/quality. The
design supervisor then reports to the project manager but in many
countries, the project manager additionally has a legal responsibil-
ity for the design. Some people say that the framework functions
properly; however, this is more of an individual than a team effort.
There are clear potential issues of divided responsibilities, with
consequences for the efficient administration of the project, espe-
cially if there are claims to be considered. The FIDIC arrangement
of an engineer in charge, with appropriately qualified assistants, is
suitable when the project has a solitary construction contract.
• Multi-contractor projects
A framework that is often utilized for substantial building projects
is where the employer designates a construction manager/project
manager, either in-house or as a consultant, together with vari-
ous separate contractors, for various divisions or trades within the
Works. Different contractors work both simultaneously and con-
secutively on the same site. This framework was initiated in the
United States and has been followed by different countries such
as Kuwait for around 20 years. It is especially supported for vast
building projects where earthworks, concrete activities, external
cladding, interior finishes, and so on, could be assigned as inde-
pendent contracts to various contractors. The individual contracts
might be design-build or designed by a Consultant (i.e., managed
by, FIDIC Design-Build or Construction Contracts). A project
manager is generally assigned to coordinate and manage the prog-
ress on the different contracts. However, such a project manager
may not be appropriate for the design/quality supervision of the
individual contracts. The engineer in FIDIC is then accountable for
design/quality supervision and manages payment certificates, and
so on, subject to the approval of the project manager representing

the employer. The coordination and management of work progress
resulting in claims, particularly when one contractor causes a delay
to another contractor, will involve multiple contracts.
In these type of projects, which are usually divided into a number
of separate works packages, the employer enters into an agreement
with a designer for the inclusive work design, and simultaneously
enters into another agreement with a construction management
specialist who is to coordinate closely with the designer and be
accountable for managing the implementation and progress of
the work. The construction management specialist will arrange
for the invitation of tenders for the different work packages of the
project to be agreed upon directly with the owner/employer for
further tendering procedures. Any potential contractual risks that
are not agreed upon by the separate contractors will be borne by
the employer, while the construction management specialist will
be remunerated a management fee. The objectives of these engage-
ments are to effectively increase the involvement of contractors
throughout the design stages of a project and to decrease the overall
duration from inception to completion. The main benefit of these
efforts and arrangements compared to the traditional methods is
that the designers can focus more on their design work, leaving the
activities of construction supervision to be handled by the manage-
ment teams.
Under the common arrangements for this type of contracts
• The employer
 Provides the required finances
 Will assign the construction management specialist to manage
the contract, follow up on the design and manufacturing activ-

ities and tasks, oversee the installation and construction on site
and construction work, and sanction payments
 Seeks to ensure an equitable sharing of construction risks in the
contractual arrangements
• The construction management specialist may manage variations,
and payment to the contractor will be according to accomplished
milestones usually on a lump sum basis or on a measure and value
basis, subject to the form of conditions of contract used.
Kuwait has used a vastly modified form of FIDIC. In the United

Arab Emirates, the project manager has no FIDIC role but represents the
employer. In Jordan, a consulting engineer is assigned by the employer to

develop feasibility studies and then function both as project manager and
as engineer for each work package. As already mentioned, some people
claim that the separation of management of work progress from quality
supervision can work successfully, but this depends on the ability of the
project manager. The answer may be for the project manager to be appro-
priately qualified and function also as the engineer.
• Employer/contractor joint venture

In Abu Dhabi, there are instances of very large projects where the
employer/developer initiates a joint venture company with a con-
tractor. The joint venture company then becomes employer for a
series of separate contracts as already discussed. The contractor in
the joint venture company may be represented in the functioning as
contractor for some contracts and may also purchase resources in
bulk and provide them to the subcontractors.
• Design development
Another practice is for a construction contract usually in the specific
conditions to require the contractor to submit shop or working draw-
ings for the approval of the engineer. The engineer’s drawings might
not provide all the required detailed information, so the contractor is
asked to provide additional information for the approval of the engi-
neer, which comprises some design work. The difference between
the engineer’s design drawings and the contractor’s detailed shop
drawings might be unclear. The contractor has to do further work,
often including design work, which may result in claims.
1.4.2.2 Responsibilities of a Construction Manager
The employer and consultant may not directly interact or communicate

with the contractor but may direct all such communication to the con-
struction manager. Likewise, the contractor may not interact or commu-
nicate directly with the employer and consultant, but rather direct all such
communication to the construction manager who shall have full author-
ity with regard to all aspects of the management of the contract. The
construction manager shall administer the contract as described in the
following text.
• The construction manager shall arrange the work forms to be uti-

lized in communications, procedures of payments, arrangements
for inspection of works, and so on, and the contractor shall utilize
such forms in his communications with the construction manager.
• The construction manager shall not rescind, change, expand, lessen,
or release the contractor of any obligations or tasks of the contract
documents or admit any portion of the works not completed in
accordance with the contract documents or issue instructions con-
flicting with contract documents.
• The construction manager or consultant shall have the authority
to reject work, which does not fit in with contract documents. At
whatever point the construction manager or consultant thinks of
it as necessary, he or she shall have the authority to require extra
assessment or testing for execution according to the provisions in
contract documents. However, neither the construction manager’s
nor the consultant’s power to act under the arrangements of this
contract, nor a decision made by either of them in good faith should
give rise to liabilities or duties for either of them toward the con-
tractor, subcontractors, suppliers, their representatives, or different
people carrying out any segments of the works.
• The construction manager will receive from the contractor all
shop drawings and details, samples, and product data, coordinate
as required per information received from other contractors, and
convey to the consultant for review and comments. The consultant
shall review and approve or take other suitable action on the con-
tractor’s deliverables such as shop drawings and details, samples,
and product data, but only for the purpose of inspection for compli-
ance with the provisions of contract documents and the design con-
cept included in the contract documents. This review process shall
be performed with an appropriate timeliness so as to avoid potential
delays in the work of the contractor or in the activities or tasks
of other relevant contractors while allowing sufficient time for the
construction manager and consultant to permit appropriate review.
• The construction manager shall verify and certify all requests for
payments to the contractor, including final payment, and the con-
sultant shall support the construction manager in such verifications
to check and certify the approval of works included therein.
• The consultant shall provide to the employer technical supervision
services throughout construction as expressed in the contract and
as outlined in the engineering consultancy agreement between the
employer and the consultant.
• The consultants are members of the project management team.
They shall perform the technical supervision tasks and activities
of contract administration throughout the project duration and the

defect notification periods. They also support the construction man-
ager in the achievement of the project within the duration set in the
project schedule and any other amendments thereto.
• The consultant shall assign the required technical personnel on-site
to support and provide continuous technical supervision of all
phases of work during construction. Such personnel shall observe
and monitor the quality of work being performed to guarantee its
conformance with the defined specifications and other contract
documents.
• The consultant shall, within reasonable time, review the contrac-
tor’s shop drawings, samples, and other submittals. However, this
review shall only be for compliance with contract provisions and
for compatibility with the design concept of the concerned proj-
ect to have it successfully functioning as designated in the contract
documents. The review shall not extend to the construction meth-
ods and procedures, safety precautions, or protection measures.
Any review of a detached item within a construction element shall
not assume approval of the element assembly in which this item
functions and the element needs to be approved as a whole again.
• If there are any errors, omissions, or conflicts in drawings, specifi-
cations, or any other contract documents discovered, the consultant
shall prepare appropriate clarification, adjustments, or additional
documents, and provide consultation as may be necessary for the
construction manager. This information shall be conveyed to the
contractor by the construction manager.
• The consultant and his representatives on-site shall provide the ser-
vices and tasks assigned to them according to the different provi-
sions of contract, including monitoring and control of the quality
of works identified. Moreover, they shall provide technical support
with solutions for investigations and problems that might arise at
the time of implementation, for the purpose of supplementary assis-
tance to the construction manager to control the project and guaran-
tee successful completion within the time and cost as agreed upon.
• The consultant and his representatives on-site shall examine phys-
ical submittals and systems that formulate part of the permanent
works at the reasonable times of testing, calibration, and initial
operation and taking over from the contractor. They shall perform
these activities in full coordination with the construction manager.
• A change request is an instrument prepared by the construction man-
ager and signed by the employer, construction manager, c onsultant,
and contractor, expressing their approval to presentation of an
adjustment in the work according to the provisions of contract and

the amount of alteration in the contract cost, if any. With regard to
the impact of the presented change on the contract time, the con-
struction manager shall study such impact in light of the manner
of the change, the timing of its issuance, and its influence on the
critical path of the work activities.
• A construction change instruction is a written order prepared by
the construction manager and signed by the employer, construction
manager, and consultant guiding a change in the works and declar-
ing a suggested basis for adjustment, if any, in the value of changed
work quantity or contract duration, or both. The employer might,
by a construction change instruction, without violating the contract,
directly request changes in the works within the extent of contract
provisions, consisting of additions, omissions, or other revisions.
• The construction manager, together with the consultant, shall,
within the defined duration in the contract on receiving the con-
tractor’s request, perform a review of the works or section and sub-
mit a report encompassing the result of the review to the owner
within the defined period (with a copy to the contractor). The report
may either include authorization that the works or sections have
been successfully completed and are ready for handing over to the
employer and identify the date of such completion or include writ-
ten instruction to the contractor stipulating the outstanding works
that are mandatory to be completed by the contractor prior to the
taking over, expressing the duration for completing such outstand-
ing works subject to approval of the construction manager and the
consultant. The contractor shall complete the outstanding works
identified in the report within the said set period. Omission of any
outstanding instances of work in the report shall not relieve the con-
tractor of the responsibility of completing the works or section fully
in compliance with the contract documents. When the contractor
has completed the required outstanding works, he shall submit a
request for a fresh inspection to the construction manager; then the
construction manager and the consultant shall conduct the same
procedures as the original review again.
• Upon completing the works, and nearing the end of the defect noti-
fication period, the contractor shall submit to the construction man-
ager a written notice that the works are completed and ready for
final inspection and approval. Meanwhile, the contractor shall also
submit to the construction manager a final contractor’s request for
payment. Upon receipt, the construction manager and consultant
shall promptly conduct due examinations. When the construction
manager and consultant verify that the works are acceptable

according to the contract provisions and the contract successfully
performed, the construction manager shall, within the duration
expressed in the contract after the expiration of the defect notifica-
tion period, issue a final payment certificate declaring the amounts
found to be due to the contractor and payable.
1.4.3 RESPONSIBILITIES MATRIX AMONG PROJECT

PARTIES
In a construction management agreement, the following work items

are usually distributed among project partners (employer, construction
manager, designer, and technical supervisor(s)):
Preconstruction phase
• Budget distribution and allocation

• Designs
• Review of designs and technical documentations
• Planning and work schedules
• Construction cost estimations
• Construction contracts:
 Work breakdown strategy
 Contractual bid documents
 Technical bid documents
 Qualification of contractors
• Licenses and approvals

• Delivery of materials
• Contract procedures
• Issuance of documents
• Receiving and evaluating bids
• Awarding contracts
Construction phase
• Site handing over
• Management of construction
• Coordination meetings and progress reports
• Coordination of consultants’ and contractors’ work
• Quality control
 General
 Quality control program
 Technical supervision
• Monitoring and updating schedules

• Follow-up cash flow and cost estimates

• Contract interpretation
• Record keeping
• Variations
• Initial approval at substantial completion
• Final approval at final completion
• Contractors’ payments:
 Auditing
 Issuance of payment certificates
 Effecting payments
• Contractors’ claims
The following (Figure 1.1) is a sample of a table representing the

responsibilities’ matrix among project parties.
Employer/
other rep- Con- Technical
Work phase and resenta- struction Design super
packages tives manager consultant vision
Pre-construction
phase
Budget distribu- M
tion and allocation
Designs A M
Review of designs M M
and technical
documentations
Planning and work A M S
schedules
Construction cost A M S
estimations
Construction
contracts
Work break- A M S
down strategy
Technical Bid A M
documents
Contractual bid A M
documents
Qualification of A M S
contractors
Employer/
Licenses and M S S
approvals
Delivery of M S S
materials
Contract
procedures
Issuance of A M S
documents
Receiving and A M S
evaluating bids
Awarding M S S
contracts
Construction
phase
Site handing over M
Management of M S
construction
Coordination of M S
consultants’ and
contractors’ work
Coordination M S
meetings and
progress reports
Monitoring M
and updating
schedules
Follow-up cash M S S
flow and cost
estimates
Quality control
program
QC program S S M
Technical M S
supervision S M
Contract M S S
interpretation

Employer/
Record keeping M
Variations A M S S
Final approval at S M
final completion
Contractors’
payments
Auditing M S
Issuance of M S
payment
certificates
Effecting M
payments
Contractors’ A M S S
claims
S: Secondary
M: Main
A: Approval
Figure 1.1. Sample of a responsibilities matrix among project parties.
M: main; S: secondary; A: approval.
1.5 TEMPORARY FACILITIES AND CONTROLS
The procedures of installation and removal of and usage charges for

temporary facilities shall be mentioned in a contract in the general

conditions cost unless otherwise specified. Permission for other entities
to use temporary services and facilities without cost includes, but is not
limited to, owner’s construction teams, architect, occupants of project,
testing parties, and others having authority.
• The following are a few outlines extracted from some con-

tracts; they could be more or less detailed in other contracts,
and are listed as a guide to temporary facility installation and
controls.
1.5.1 INFORMATIONAL SUBMITTALS
(a) Site plan: Show temporary facilities, utility hookups, staging areas,
and parking areas for construction personnel.
(b) Fire safety program: Show compliance with requirements of
authorities having jurisdiction. It indicates contractor personnel
responsible for management of fire prevention program.
(c) Moisture protection plan: Describe procedures and controls for
protecting materials and construction from water absorption and
damage.
1. Describe delivery, handling, and storage provisions for materi-
als subject to water absorption or water damage.
2. Indicate procedures for discarding water-damaged materials,
protocols for mitigating water incursion into completed work,
and replacing water-damaged work.
3. Indicate sequencing of work that requires water, such as sprayed
fire-resistive materials, plastering, and terrazzo grinding, and
describe plans for dealing with water from these operations.
Show procedures for verifying that wet construction has dried
sufficiently to permit installation of finishing materials.
(d) Dust and HVAC control plan: Submit coordination drawing and
description that indicates the control measures for dust and heating,
ventilation, and air conditioning (HVAC) proposed for use, sug-
gested locations, and suggested time schedule for their operation.
Identify further alternatives if proposed measures are later deter-
mined to be insufficient. Include the following:
1. Locations of dust control partitions at each phase of work
2. HVAC system isolation schematic drawing
3. Location of proposed air filtration system discharge
4. Waste-handling procedures
5. Other dust control measures
1.5.2 QUALITY ASSURANCE
(a) Electric service: Comply with the predefined standards and regula-
tions for temporary electric service.
(b) Tests and inspections: Arrange for authorities having jurisdiction
to test and inspect each temporary utility before use, and obtain
required certifications and permits.
(c) Accessible temporary egress: Comply with the predefined
standards and regulations for accessibility standards.
1.5.3 EXECUTION
1.5.3.1 Installation, General
(a) Locate facilities where they will serve the project adequately and
result in minimum intervention with execution of the work. Relo-
cate and modify facilities as required by progress of the work.
Locate facilities to limit site disturbance.
(b) Provide each facility ready for use when needed to avoid delay. Do
not remove until facilities are no longer needed or are replaced by
authorized use of completed permanent facilities.
(c) Temporary use of permanent facilities: Engage installer of each
permanent service to assume responsibility for operation, mainte-
nance, and protection of each permanent service during its use as a
construction facility before owner’s acceptance regardless of previ-
ously assigned responsibilities.
1.5.3.2 Temporary Utility Installation
(a) General: Install temporary service or connect to existing service.

• Arrange with utility company, employer, and existing users for
time when service can be broken up, if necessary, to make con-
nections for temporary services.
(b) Sewers and drainage: Provide temporary utilities to remove waste
legally.
• Connect temporary sewers to municipal system as directed by
authorities having jurisdiction.
(c) Water service: Connect to owner’s existing water service facilities.
Clean and maintain water service facilities in a condition accept-
able to the employer. At substantial completion, restore these facil-
ities to condition existing before initial use.
(d) Sanitary facilities: Provide temporary toilets, wash facilities, and
drinking water for use of construction personnel. Comply with
requirements of authorities having jurisdiction for type, number,
location, operation, and maintenance of fixtures and facilities.
(e) Heating and cooling: Provide temporary heating and cooling
required by construction activities for curing or drying of com-
pleted installations or for protecting installed construction from
adverse effects of low temperatures or high humidity. Select equip-
ment that will not have a harmful effect on completed installations
or elements being installed.
(f) Isolation of work areas in occupied facilities: Prevent dust,

fumes, and odors from entering occupied areas.
• Prior to commencing work, isolate the HVAC system in the
area where work is to be performed according to coordination
drawings.
 Disconnect supply and return ductwork in work area from
HVAC systems servicing occupied areas.

 Maintain negative air pressure within work area using
equipped air filtration units, starting with commencement

of temporary partition construction and continuing until
removal of temporary partitions is complete.
• Maintain dust partitions during the work. Use vacuum collec-
tion attachments on dust-producing equipment. Isolate limited
work within occupied areas using portable dust containment
devices.
• Perform daily construction cleanup and final cleanup using
approved filter-equipped vacuum equipment.
(g) Ventilation and humidity control: Provide temporary ventilation
required by construction activities for curing or drying of com-
pleted installations or for protecting installed construction from
adverse effects of high humidity. Select equipment that will not
have a harmful effect on completed installations or elements being
installed. Coordinate ventilation requirements to produce ambient
condition required and minimize energy consumption.
• Provide dehumidification systems, when required, to reduce
substrate moisture levels to a level required to allow installation
or application of finishes.
(h) Electric power service: Connect to owner’s existing electric power
service. Maintain equipment in a condition acceptable to owner.
(i) Lighting: Provide temporary lighting with local switching that
provides adequate illumination for construction operations, obser-
vations, inspections, and traffic conditions.
• Install and operate temporary lighting that fulfills security and
protection requirements without operating entire system.
• Install lighting for project identification sign.
(j) Telephone service: Provide temporary telephone service in com-
mon use facilities for use by all construction personnel. Install one
telephone line(s) for each field office.
• Provide additional telephone lines for the following:
 Provide a dedicated telephone line for each facsimile
machine in each field office.

• At each telephone, post a list of important telephone numbers.

 Police and fire departments
 Ambulance service
 Contractor’s home office
 Contractor’s emergency after-hours telephone number
 Architect’s office
 Engineers’ offices
 Owner’s office
 Principal subcontractors’ field and home offices
• Provide superintendent with cellular telephone or portable two-

way radio for use when away from field office.
1.5.4 SUPPORT FACILITIES INSTALLATION
(a) General: Comply with the following:

• Provide construction for temporary offices, shops, and sheds
located within construction area according to specifications and
rules.
• Maintain support facilities until architect schedules substantial
completion inspection. Remove before substantial completion.
Personnel remaining after substantial completion will be per-
mitted to use permanent facilities, under conditions acceptable
to the employer.
(b) Temporary roads and paved areas: Construct and maintain tem-
porary roads and paved areas adequate for construction operations.
Locate temporary roads and paved areas within construction limits
indicated on drawings.
• Provide dust control treatment that is nonpolluting and
non-tracking. Reapply treatment as required to minimize
dust.
(c) Temporary use of permanent roads and paved areas: Locate
temporary roads and paved areas in same location as permanent
roads and paved areas. Construct and maintain temporary roads and
paved areas adequate for construction operations. Extend tempo-
rary roads and paved areas, within construction limits indicated as
necessary for construction operations.
• Coordinate elevations of temporary roads and paved areas with
permanent roads and paved areas.
• Prepare subgrade and install subbase and base for temporary
roads and paved areas according to specifications.
• Recondition base after temporary use, including removing con-

taminated material, regrading, proof rolling, compacting, and
testing.
(d) Traffic controls: Comply with requirements of authorities having
jurisdiction.
• Protect existing site improvements to remain including curbs,
pavement sidewalks, and utilities.
• Maintain access for fire-fighting equipment and access to fire
hydrants.
(e) Parking: Use designated areas of owner’s existing parking areas
for construction personnel.
(f) Dewatering facilities and drains: Comply with requirements of
authorities having jurisdiction. Maintain project site, excavations,
and construction free of water.
• Dispose of rainwater in a lawful manner that will not result in
flooding project or adjoining properties or endanger permanent
work or temporary facilities.
• Remove snow and ice as required to minimize accumulations.
(g) Project signs: Provide project signs as indicated. Unauthorized
signs are not permitted.
• Identification signs: Provide project identification signs as indi-
cated on drawings.
• Temporary signs: Provide other signs as indicated and as
required to inform public and individuals seeking entrance to
project.
 Provide temporary, directional signs for construction per-
sonnel and visitors.

• Maintain and touch up signs so they are legible at all times.
(h) Waste disposal facilities: Comply with required specifications.
(i) Lifts and hoists: Provide facilities necessary for hoisting materials
and personnel.
• Truck cranes and similar devices used for hoisting materials are
considered “tools and equipment” and not temporary facilities.
(j) Temporary elevator use: Comply with required specifications.
(k) Existing elevator use: Use of owner’s existing elevators is permit-
ted, provided elevators are cleaned and maintained in a condition
acceptable to owner. At substantial completion, restore elevators
to condition existing before initial use, including replacing worn
cables, guide shoes, and similar items of limited life.
• Do not load elevators beyond their rated weight capacity.
• Provide protective coverings, barriers, devices, signs, or other

procedures to protect elevator car and entrance doors and frame.
If, despite such protection, elevators become damaged, engage
elevator installer to restore damaged work so no evidence
remains of correction work. In case there are items that cannot
be refinished in field, it should be returned to the shop to make
required repairs and refinish entire unit, or provide new units as
required.
(l) Temporary stairs: Until permanent stairs are available, provide
temporary stairs where ladders are not adequate.
(m) Existing stair usage: Use of owner’s existing stairs will be per-
mitted, provided stairs are cleaned and maintained in a condition
acceptable to owner. At substantial completion, restore stairs to
condition existing before initial use.
• Provide protective coverings, barriers, devices, signs, or other
procedures to protect stairs and to maintain means of egress. If
stairs become damaged, restore damaged areas so no evidence
remains of correction work.
(n) Temporary use of permanent stairs: Use of new stairs for con-
struction traffic will be permitted, provided stairs are protected and
restored to new condition at time of substantial completion.
1.5.5 SECURITY AND PROTECTION FACILITIES

INSTALLATION
(a) Protection of existing facilities: Protect existing vegetation, equip-

ment, structures, utilities, and other improvements at project site
and on adjacent properties, except those indicated to be removed or
altered. Repair damage to existing facilities.
(b) Environmental protection: Provide protection, operate tempo-
rary facilities, and conduct construction as required to comply with
environmental regulations and that minimize possible air, water-
way, and subsoil contamination or pollution or other undesirable
effects.
• Comply with work restrictions specified.
(c) Temporary erosion and sedimentation control: Provide mea-
sures to prevent soil erosion and discharge of soil-bearing water
runoff and airborne dust to undisturbed areas and to adjacent
properties and walkways, according to erosion and sedimentation
control drawings, requirements of construction general permit, or

authorities having jurisdiction, whichever is more stringent.
• Verify that flows of water redirected from construction areas or
generated by construction activity do not enter or cross tree or
plant protection zones.
• Inspect, repair, and maintain erosion and sedimentation control
measures during construction until permanent vegetation has
been established.
• Clean, repair, and restore adjoining properties and roads
affected by erosion and sedimentation from project site during
the course of the project.
• Remove erosion and sedimentation controls and restore and
stabilize areas disturbed during removal.
(d) Storm water control: Comply with requirements of authorities
having jurisdiction. Provide barriers in and around excavations and
subgrade construction to prevent flooding by runoff of storm water
from heavy rains.
(e) Tree and plant protection: Install temporary fencing to protect
vegetation from damage from construction operations. Protect tree
root systems from damage, flooding, and erosion.
(f) Pest control: Engage pest control service to recommend prac-
tices to minimize attraction and harboring of rodents, roaches, and
other pests and to perform extermination and control procedures at
regular intervals so that the project will be free of pests and their
residues at substantial completion. Perform control operations law-
fully, using environmentally safe materials.
(g) Site enclosure fence: Before construction operations begin, furnish
and install site enclosure fence in a manner that will prevent people
and animals from easily entering site except by entrance gates.
• Extent of fence: As required to enclose entire project site or
portion determined sufficient to accommodate construction
operations.
• Maintain security by limiting number of keys and restricting
distribution to authorized personnel. Furnish one set of keys to
the owner.
(h) Security enclosure and lockup: Install temporary enclosure
around partially completed areas of construction. Provide lock-
able entrances to prevent unauthorized entrance, vandalism, theft,
and similar violations of security. Lock entrances at end of each
workday.
(i) Barricades, warning signs, and lights: Comply with requirements

of authorities having jurisdiction for erecting structurally adequate
barricades, including warning signs and lighting.
(j) Temporary egress: Maintain temporary egress from existing occu-
pied facilities as required by authorities having jurisdiction.
(k) Covered walkway: Erect protective, covered walkway for passage
of individuals through or adjacent to the project site. Coordinate
with entrance gates, other facilities, and obstructions. Comply with
regulations of authorities having jurisdiction and requirements.
• Construct covered walkways using scaffold or shoring framing.
• Provide overhead decking, protective enclosure walls, hand-
rails, barricades, warning signs, exit signs, lights, safe and well-
drained walkways, and similar provisions for protection and
safe passage.
• Paint and maintain appearance of walkway for the duration of
the work.
(l) Temporary enclosures: Provide temporary enclosures for protec-
tion of construction, in progress and completed, from exposure,
foul weather, other construction operations, and similar activities.
Provide temporary weathertight enclosure for building exterior.
• Where heating or cooling is needed and permanent enclosure is
incomplete, insulate temporary enclosures.
(m) Temporary partitions: Provide floor-to-ceiling dustproof parti-
tions to limit dust and dirt migration and to separate areas occupied
by the owner from fumes and noise.
(n) Temporary fire protection: Install and maintain temporary fire
protection facilities of types needed to protect against reasonably
predictable and controllable fire losses.
(o) Moisture and mold control: Avoid trapping water in finished
work. Document visible signs of mold that may appear during
construction.
1.5.6 OPERATION, TERMINATION, AND REMOVAL
(a) Supervision: Enforce strict discipline in use of temporary facili-

ties. To minimize waste and abuse, limit availability of temporary
facilities to essential and intended uses.
(b) Maintenance: Maintain facilities in good operating condition until
removal.
• Maintain operation of temporary enclosures, heating, cooling,

humidity control, ventilation, and similar facilities on a 24-hour
basis where required to achieve indicated results and to avoid
possibility of damage.
(c) Temporary facility changeover: Do not change over from using
temporary security and protection facilities to permanent facilities
until substantial completion.
(d) Termination and removal: Remove each temporary facility when
need for its service has ended, when it has been replaced by autho-
rized use of a permanent facility, or no later than substantial com-
pletion. Complete or, if necessary, restore permanent construction
that may have been delayed because of interference with temporary
facility. Repair damaged work, clean exposed surfaces, and replace
construction that cannot be satisfactorily repaired.
• Materials and facilities that constitute temporary facilities are
the property of the contractor. The owner reserves the right to
take possession of project identification signs.
• Remove temporary roads and paved areas not intended for or
acceptable for integration into permanent construction. Where
area is intended for landscape development, remove soil and
aggregate fill that do not comply with requirements for fill or
subsoil. Remove materials contaminated with road oil, asphalt,
and other petrochemical compounds, and other substances
that might impair growth of plant materials or lawns. Repair
or replace street paving, curbs, and sidewalks at temporary
entrances, as required by authorities having jurisdiction.
• At substantial completion, repair, renovate, and clean perma-
nent facilities used during construction period. Comply with
final cleaning requirements.
CHAPTER 2
DEVELOPING
CONSTRUCTION
STRATEGIES
2.1 INTRODUCTION
This chapter begins with an overview of developing project strategy and

ends with listing the main steps of developing a performance management
process.
2.2 WHAT IS STRATEGY?
Strategy is a general way to deal with a project. It is often called a game

plan. The distinction between strategy and tactics is that tactics take you
down to the subtle elements and minute details of precisely how you will
take the necessary steps. For instance, if I have chosen that the most ideal
approach to construct a house is to utilize preassembled segments, then
I should work out how I am going to practically make the parts. Do I
collect a whole wall and send it to the construction site, or do I make it in
small sections that can be combined at the site?
Logistics includes how I will get the small segments out to the site,
how I will supply the laborers with apparatuses and other equipment, how
I will deliver them, and so on. So tactics push us into minute details.
2.3 THE IMPORTANCE OF STRATEGY
Once a manager said that he could not keep engineers in light of the fact
that the huge companies in the vicinity could pay more, and no sooner
would he get a youthful engineer ready than bigger companies would

take that individual away. He decided to adopt a new strategy. Rather
than appoint engineers, he would hire technical school graduates and train
them to be engineers. Since the big companies generally favored engi-
neers with four-year degrees, he rarely lost a technical school graduate
to them. Unquestionably, his tech school engineers might not have been
quite as qualified as those with full degrees, but they were sufficiently
competent for his requirements and the cost of continually supplanting
engineers dropped significantly.
In a practically identical way, about 15 years earlier, the United States
had a dearth of programming engineers for a long time, and numerous
associations perceived that they could finish programming in India at a
stunningly lower cost than if they used local programming designers for
a similar job.
The software engineers in India speak great English, are knowledge-
able, and work for significantly less than American developers do since
their typical cost for basic items is much lower than that in the United
States. This technique has been utilized for various years to complete
ventures on time and at less cost than would somehow or another be
conceivable.
The airline industry has utilized a comparative system in its Airbus
line of airplanes. By and large, pilots are prepared to fly a specific type of
aircraft. Thus, a team that can fly one plane can’t fly a similar one with a
slightly different design. The Airbus has a few planes with various seating
limits that can be flown by the same teams. The cockpit designs are the
same, and the planes are handled in such a similar way that the teams
don’t need to be retrained to change from one to the next. What’s more,
each carrier does not need to stock the same number of various extra parts
on the grounds that all the planes utilize similar ones. This speaks to a
noteworthy reduction in stock costs, pilot preparation, and so on. Boeing
designed the 757 and 767 planes such that the same pilots can fly them. As
is the case with Airbus, this saves cash for the airline.
A small organization that planned and fabricated a land mobile com-
munications plant had just 150 workers, and naturally its design staff were
few in number. There was no chance that the organization could contend
specifically with the big players in the amusement arena, in light of the fact
that the others had a significantly greater number of assets than the small
organization. So one of the specialists considered doing secluded outline
of radios. Rather than designing each new radio “starting with no outside
help,” the organization would plan a few circuits that could be utilized
as a part for all models. Examples are audio amplifiers and intermediate
DEVELOPING CONSTRUCTION STRATEGIES • 33
frequency (IF) strips. By utilizing this strategy, the organization could

build up a group of items in a moderately brief time. The organization was
utilizing its restricted assets.
During the construction of the Channel Tunnel linking France with
England, the plan was to begin digging from both sides. Utilizing laser-
guided technology, the teams met in the center with insignificant error in
position. This methodology enabled the venture to be finished in a fraction
of the time it would have taken to dig from one side to the other in light
of the fact that you can dig just so much each day. By going in both direc-
tions, the rate of digging was practically multiplied.
2.4 PROJECT AND TECHNICAL STRATEGIES
Surprisingly there are frequently two viewpoints to project strategy. For

instance, assume you wish to invite people over for a meal, and you are
thinking about how to do it. You could (1) cook the food yourself, (2) take
everybody to an eatery, (3) have a potluck supper, in which everybody
brings something, or (4) have a caterer supply the food. You look at the
choices and conclude that you will cook the food yourself. This is your
project strategy. Whatever the decision, by which method will you cook
the food? You could (1) cook it routinely on your stove, (2) microwave it,
or (3) have a patio grill. These three methodologies would be called tech-
nical strategies. Your inclination is to have a patio grill, but you find that
your grill is broken. You would prefer not to cook on the stove or micro-
wave, so you choose to have the food catered. At the end of the day, your
decision of specialized methodology may decide your project strategy.
In a technological organization, for instance, you are thinking about
building up an item by utilizing another innovation. Nonetheless, nobody
in the organization knows anything about that innovation, so you should
either contract out that part of the work (a project strategy) or build up the
capacity.
A general rule in choosing a technical strategy is that you should not
opt to have a tight venture due date. Obviously, this method is abused
much of the time in innovative businesses; in addition, due dates are often
missed and items are discharged randomly, which later have field issues.
This can do genuine harm to an organization’s reputation. Integral with
this is the fact that you should separate disclosure from advancement in
a venture. That is, you should not be attempting to make some innova-
tion work when you should be building an item. The best approach is
to do a feasibility study, and after that, in light of the result, dispatch an
a dvancement extend. In the remote eventuality that you are attempting to

demonstrate plausibility and build up an item in the meantime and you
can’t make the innovation work, that venture will be declared a disap-
pointment. Notwithstanding, regardless of what result you get with a prac-
ticality contemplation—yes, it works, or no, it doesn’t—that should be
judged a fruitful venture, as you have indisputably addressed a question.
2.5 PRODUCING AND SELECTING THE

APPROPRIATE STRATEGY
Create a rundown of optional venture and technical strategies that may

apply to your venture. At that point, you select the mix that you judge to be
ideal. Creating the rundown might be as basic as taking a gander at exist-
ing strategies and posting them, or you may need to concoct an alternate
strategy. Take note of the fact that this progression requires conceptual or
strategic vision. People with a solid inclination for critical thinking will
be important at this progression, but in the event that they aren’t accessi-
ble, individuals with other deduction capabilities should “venture into” the
conceptualizing or brainstorming techniques.
2.5.1 CREATING A STRATEGY
As an instance of this, two experts developed a way to deal with critical

thinking that was extremely thorough. They persuaded the administration
at General Motors (GM) to accept it. Indeed, GM needed the majority of
their representatives to be trained in the new strategy. The two experts
realized that they couldn’t, in any way, train the individuals themselves,
so they considered another approach. They would train people inside GM
to convey the training. They led a series of mentor workshops and made
GM independent in developing their own particular interior training. All
the experts needed to do was to pitch the classroom techniques to GM, and
that is how they made their money. This was an innovative approach at the
time, but it has turned out to be routine from that point forward.
In the event that you need to design a system, you need to utilize
innovative critical thinking techniques. The most well-known one is con-
ceptualizing, in which individuals from a team brainstorm the maximum
number of ideas they can and, without assessment, at that point, select one.
There are numerous methodologies for growing smart ideas. One great
source is the book by Michael Michalko, Thinkertoys: A Handbook of
Creative-Thinking Techniques (Michalko 1995). Various thought-devel-

oping techniques are demonstrated in Chapter 6, so you might need to
backpedal and survey those.
2.5.2 DECIDING ON A STRATEGY
Choosing a strategy occasionally is a straightforward matter. However, if

various issues are included, the decision may not be so simple to make.
A well-ordered system that will direct you through a procedure is displayed
later in a different section of this chapter, yet you should comprehend why
the procedure is followed rather than applying it in a repetitive way. When
you were developing thoughts for a project strategy, you used a conceptu-
alizing procedure. To choose the best mix of project and technical strategy,
likewise, a conceptualizing or brainstorming is required. Basic examina-
tion is required to deal with the facts and important points of the different
decisions, so in the event that you have nobody on your team who is okay
with such considerations, you need to acquire somebody who is.
2.5.3 SORTING/CLASSIFYING ALTERNATIVES
To determine the optimum mix of strategies, both lists (project and techni-
cal strategies) should be sorted. This could be easily done using a priority
matrix, as indicated in Table 2.1. There are some approaches to achieve
this. One is to settle each choice using a binary method. Assume, for
instance, that I have four strategies. On the off chance that I have some
approach to rank them quantitatively, it may not be difficult to settle on a
decision; however, there might be various elements included that influence
the “measure” that everyone would yield, and it would get excessively
confounded, making it impossible to work out. So I just check whether
one methodology is superior to another. In the event that the appropriate
Table 2.1. Priority matrix of four strategies with row 1 filled in

Strategy 1 2 3 4 Sum Order
1 # 1 0 1
2 #
3 #
4 #
response is “Yes,” I put a 1 in the cell, and on the off chance that it is “No,”
I put a 0. In the event that I continue crosswise over Row 1 and pose this
inquiry for Strategy 1 compared with each of the others, I get the outcome
shown in Table 2.1. This system is called “paired comparisons.” Next, I
check as to whether Strategy 2 is superior to each of the others. Nonethe-
less, you will note that when I check as to whether Strategy 2 is superior
to Strategy 1, I have just posed that inquiry in Row 1, yet in reverse. So
whatever I put in Row 1 under Strategy 2 should now be the opposite in
Row 2, Column 1. This is depicted in Table 2.2.
In fact, it is observed that as you proceed with the matrix, you will see
that each cell in Column 1 will be the reverse of what is in Row 1, and that
a similar pattern will be valid for each column cell below the diagonal, so
you can save time by essentially filling in the rows of the matrix diago-
nally and afterward filling in the columns with the reverse of the rows. The
final outcome is shown in Table 2.3.
Next, you add up every row, and the row with the highest aggregate
will be your first decision, that with the second highest aggregate will be
your second decision, and so on. In the event that you observe that two
rows add up to a similar aggregate, simply look in the matrix to see which
of the two decisions outranks the other, since that choice has just been
made. The last outcome for this matrix is displayed in Table 2.4.
This positioning ought to, in a perfect world, be finished by a team.
When this is the situation, you can even now manage the strategies in a
binary manner, but now you solicit the responses of your colleagues as to
Table 2.2. Priority matrix with row 2 and column 1 filled in

1 # 1 0 1
2 0 # 1 1
3 1 #
4 0 #
Table 2.3. Priority matrix with all entries filled in

1 # 1 0 1
2 0 # 1 1
3 1 0 # 0
4 0 0 1 #
Table 2.4. Priority matrix with totals and ranks filled in

1 # 1 0 1 2 1
2 0 # 1 1 2 2
3 1 0 # 0 1 4
4 0 0 1 # 1 3
Table 2.5. Matrix with votes tallied for Strategy 1 versus Strategy 2
1 # 8 6 1
2 2 #
3 4 #
4 9 #
Table 2.6. Matrix completely filled in and totaled

1 # 8 6 1 15 2
2 2 # 5 1 8 4
3 4 5 # 2 11 3
4 9 9 8 # 26 1
how many of them surmise that Strategy 1 is superior to Strategy 2, and

you tally the votes. Assume, for instance, that you have 10 colleagues,
including yourself, and you request an examination of Strategy 1 v ersus
Strategy 2. When you enter the votes, you put the votes in favor of S
trategy
1 in Row 1 and the votes in favor of Strategy 2 in Row 2. This is demon-
strated in Table 2.5.
Proceed in this way until the point when you have finished all the
votes, and afterward, add the votes in each row. This gives the outcome
depicted in Table 2.6. This is a more finely tuned approach than utilizing
zeros as you did earlier.
2.5.3.1 Analytical Hierarchy Process
The priority matrix can be improved by assessing different characteristics

of every decision. For instance, the primary question is whether a given
strategy can meet our objectives. It might be that one decision will meet
particular targets, yet it is not on par with another decision in meeting the
performance objective. In any case, are the main objectives of the project
being considered?
It may be the case that performance is most vital and time is next.
Graham and Englund (1997) have published that mindshare is what you
need to accomplish with a product so as to capture a part of the overall
industry or a market share. For instance, when somebody mentions laser
jet printers, Hewlett-Packard needs everybody to think about their units
as the most efficient. So performance might be the chief prerequisite to be
met. Time, scope, and cost may be next in importance.
In case weights are allocated to these, you would then have a more
confusing premise to break down and analyze. Presently, you would need
to pose the question: Is Strategy 1 superior to Strategy 2 with regard to
performance, cost, time, and scope? Furthermore, you would count the
votes in favor of every one of the four criteria for each paired comparison.
To touch base at a numerical weight for every decision includes matrix
algebra, which is best performed with a product program called Expert
Choice. The program permits examination of quantitative and qualitative
aspects of a decision, making it an amazingly effective method for zeroing
in on the right choice. Discover more about the product at www.expert-
choice.com.
2.5.3.2 Performing SWOT and Risk Analyses
In picking the best project strategy, it is a smart idea to do a SWOT and

risk analysis. The acronym SWOT stands for strengths, weaknesses,
opportunities, and threats. It is a methodology that was initially utilized as
a part of marketing analysis. Before entering a new project, it is valuable
to ask the following questions:
• What are the strengths?

• How could they be exploited?
• What are the weaknesses?
• How do we limit the impact of them?
• What opportunities could be beneficial?
• How could they be exploited?
• What are the potential threats?
• How would we be able to bargain successfully with them?
It is recommended that you identify every one of the strengths you

can consider, and after that, answer the question of how to exploit them,
instead of identifying a given strength followed promptly by deciding how

to manage it specifically. This procedure goes faster when in doubt. The
same applies for the other three dimensions of the SWOT.
2.5.4 COMBINING ALL TOGETHER
Project strategy overall depicts how the job will be finished. This is often
called a game plan. You should consider both your project and technical
strategies thoroughly, since the decision of your technical strategy may
influence your project strategy and vice versa.
The following is a well-ordered methodology for creating and choos-
ing a project strategy.
1. Brainstorm a rundown of options/alternative project and technical

strategies. Keep in mind, in brainstorming, there is no assessment
or feedback until after the sum total of ideas have been recorded.
2. Once the project strategies have been recorded, rank them utiliz-
ing the priority matrix introduced earlier. Do likewise for technical
strategies.
3. Is the first categorized technical strategy matching with the first
categorized project strategy? If not, choose which combination of
the two will be perfect before proceeding.
4. For the chosen strategies, would you be able to fulfill your per-
formance, cost, time, and scope requirements? In case it is “yes,”
proceed to step 5. Assuming “no,” at that point, select another strat-
egy to assess. Proceed with this procedure until the point that the
appropriate response is “yes.”
5. Work from within a SWOT frame, in which you include threats
and risks. Try not to fill in the correct list of the threats at this time.
Note that you are doing this for strategy, not for implementation of
steps.
6. Next, perform risk analyses (introduced later).
7. Are any identified weaknesses sufficiently genuine that they may
risk the strategy? Would they be able to be overcome? If not, at
that point, you may need to choose the next strategy in your matrix.
8. Now consider outcomes. Will the selected strategy prompt unsuit-
able outcomes? Assuming this is the case, you may need to dismiss
the strategy.
9. Finally, lead a field investigation in which you distinguish the posi-
tive factors in the condition that will enable your strategy to succeed
and the negative factors that may do the opposite. These factors can
be social, political, or global issues. At that point ask yourself:
(a) Can I disregard any opposing factors? On the off chance that it
is a yes, check them off your rundown. If not, at that point, ask.
(b) Can the rest of the factors be overcome? If not, at that point, ask.
(c) Can I work around them without making foes forever? If not, at
that point, ask.
(d) Can I neutralize them by asking the following question: “What
must I do to persuade you that this strategy is alright?”
2.6 EMPLOYING A PERFORMANCE
MANAGEMENT PROCESS
A few years back, organizations battled opposition on the battleground

of efficiency and the tight management of resources. Since effectiveness
has turned into guaranteed, competitiveness depends on being compelling,
which is tied in with working more astutely. The initial step to enhancing
performance is to connect with your people through a successful perfor-
mance management process. Numerous associations have a process, yet
what makes the difference between performance management that is a
once-per-year, tick-in-the-box paperwork exercise and a process that is
alive and drives enhanced performance?
It is not wrong to lead individuals making them desiring to achieve
perfect job; however, you are doing them an injustice on the off chance
that you are not revealing to them what your requirements are within that
job. Without clearly verbalized requirements, individuals will perform
whatever comes to their desks. However, how would you determine that
what goes to their desks is really essential and will enable you to accom-
plish the business objectives? By not setting goals, you are setting up
your employees for disappointment and failure. In the event that you need
a performance management process that has any kind of effect, it must
incorporate the following six steps.
2.6.1 OBLIGATION FROM THE TOP (THE PROCESS IS

SUCCESSFUL)
Performance management is for everybody in the organization. The

moment it would seem that senior directors are in some way “excluded”
from the process or are not inspired by the results, the process will lose
credibility. To avoid this, it is fundamental that directors show others
how it’s done and experience the process themselves. They must likewise
be considered responsible for driving the process with their employees.
A basic method for doing this is to incorporate viable and effective perfor-
mance management as one of their objectives.
A decent quality performance management process gives valuable
data and accordingly the process should be examined somehow with the
goal so that senior directors can monitor progress. Measurements, for
example, number of forms finished, have limited use, but information, for
example, trends in development requirements and worker issues, can give
the senior team a helpful heads-up and an opportunity to be proactive and
show their responsibility regarding the process.
2.6.2 SETTING CLEAR OBJECTIVES
Objectives must portray desired outcomes rather than tasks. Tasks are the
path through which you accomplish the outcome and they may change,
whereas the outcomes stay unaltered unless the business needs movement.
Let us investigate this in more detail. If I request that you clear the floor,
tidy the surfaces, and clean the windows of a room, I am giving you a
rundown of tasks. However, if I request that you clean the room with the
goal that all surfaces are free of dust, I have depicted an outcome and
you would then complete the previously described tasks to accomplish
that outcome. Outcome language is imperative since it clarifies what the
desired future state is.
So how would you know which outcomes are imperative? The appro-
priate response is clear. It is those that help the office or specialty unit
objectives, which thus should bolster the business strategy. One reason
that employees will feel engaged in their job is the point at which they see
how their function includes esteem. On the off chance that they realize
that they are having any kind of effect, they will feel spurred and need to
perform getting it done.
Employees will likewise feel proprietorship for objectives that they
have taken part in. It is wrong to believe that the director alone knows
best. The directors may have a more comprehensive point of view and
certainly that is important with a specific end goal to ensure that objectives
are relevant, yet it is the employee who comprehends the subtle elements
of the job, and both perspectives are important for the development of
clear objectives.
Another approach to set up your employees for progress is to guaran-
tee that objectives are composed such that the individual can impact the
outcome. In the event that the outcome is the consequence of the work of
a team, it is still fundamental that the objectives reflect what the individual
adds to that team. This data will be required so as to survey whether the
performance targets have been achieved or not. To ensure that objectives

are clear, they should be written in a “SMART” format:
S: Specific (identify the results to be met)

M: Measurable (with regard to quality, quantity, or cost)
A: Achievable (challenging but attainable; can be influenced by the
individual)
R: Relevant (objectives serve business goals)
T: Time bound (by when will the objective be attained?)
SMART objectives clarify objectives for workers and make the

performance review process toward the close of the year more straightfor-
ward and transparent.
2.6.3 REASONABLE FEEDBACK
Feedback is essential data that guide individuals regarding what to do

more of or less of to enhance their performance. To have the desired effect
on performance, it needs to be given promptly or as near the circumstance
that warrants feedback as would be prudent. It should NOT be amassed
over the span of the year and conveyed as confirmation of a poor per-
formance evaluation. Not only is this demotivating for the employee, it
additionally speaks to a rundown of missed opportunities for performance
enhancement and fortifying great conduct.
Articulations such as, for example, “Great job!” are surely reassuring
and useful for confidence, yet they don’t give the performer any data on
precisely what he or she did well. Good feedback is specific and portrays
the move the performer made and the effect it had, for example, “You
were late in furnishing us with the information, thus we needed to work
extended periods of time the next day so as to meet the project due date.”
The depiction should concentrate on something the individual can fol-
low upon and change and NOT on the individual. Personal feedback will
ensure a guarded reaction, for example, “You are so untidy!”
Research has indicated employees to be open to feedback for develop-
ment in the event that it is reasonable and precise; workers will anticipate
that supervisors are prepared and knowledgeable before giving feedback.
Additionally, managers who work on their relationships with their team
and create a situation of trust will have more credibility while conveying
troublesome feedback than individuals who oversee from behind closed
doors.
There is a tendency to harp on feedback for development through-

out the performance dialog and this will have precisely the inverse of the
desired impact. Accentuation on performance shortcomings to the exclu-
sion of other feedback is a performance killer. It is necessary to adjust
feedback for enhancement with constructive criticism.
2.6.4 SYSTEMATIC PROGRESS FOLLOW-UP
Any activity considered vital should be checked with a specific end goal
to guarantee that it is achieved. Envision managing a project without audit
gatherings. How would you realize that you are still on track a couple of
months down the line? How would you consider changes in needs? How
would you know what progress has been achieved? What support will you
require and when? For similar reasons, worker objectives and develop-
ment plans must be checked on all the time.
Without audits, performance management will be a once-a-year exer-
cise. A year down the line, the objectives that were composed at the begin
of the year could have changed in terms of significance, gone up or down
the need list or even been dropped altogether, so having progress reviews
are basic. We have seen that a performance management process has to be
perceived as reasonable for it to be fruitful and the best way to guarantee
this is for workers to recognize what they are being evaluated against. In
the event that the objectives are not up to date, in what capacity will you
give an objective appraisal of performance?
There is controversy over how regularly reviews should be pro-
cessed. Numerous associations feel that one midyear audit is adequate.
The important question is that are you sure that employee objectives are
important amid whatever is left of the year? If the response to this is “Not”
at that point, it is better to add reviews. Reviews should happen in any
event once every quarter and they should cover the following:
• Progress versus objectives

• Feedback (positive and formative)
• Adjustment of objectives in accordance with changes in the busi-
ness needs
• Review of the improvement plan
• Support needed to push ahead
Reviews are not time-consuming. The procedures already mentioned

can be completed in 60 minutes. Truth be told, review meetings are
p robably going to get shorter, the more frequently you keep in contact, and
correspondence is always more effective when it is “small and regular”
instead of in enormous quantities. Consider the benefit of four hours of
your time for performance reviews versus the cost of losing your workers
out and out.
Likewise, it is redundant for each review to happen face-to-face. In
the present work environment, with travel and remote working being the
standard, teams have to discover creative methods for staying in contact
and these can be utilized for performance reviews as well. There is no
doubt about the advantage of a face-to-face meeting, and challenging
feedback should not be conveyed in an e-mail, but it is conceivable to
cover a great part of the essentials through phone and e-mail and spare the
truly vital themes for the meetings face-to-face.
Reviews should not require a considerable amount of printed paper-
work, only some place to record any corrections made. Any performance
management process that makes it hard to modify objectives to consider
environmental and ecological changes must be streamlined. Having the
capacity to audit and refresh objectives is the basic segment of building a
performance management process as opposed to a performance manage-
ment event.
2.6.5 PLAN DEVELOPMENT
A portion of enhancing performance is determining where the deficit is

and figuring out how to close the gap. In addition, you may be anticipating
that workers will assume more responsibilities or new tasks (maybe the job
has changed or new innovation has been actualized). Their performance
reflects on you and it is prudent that you set up an advancement to guaran-
tee that they can adapt to the new difficulties. Longer-term advancement
objectives increment employee inspiration as well as business sense, as it
is more practical to develop your own particular skills instead of adopting
them from outside.
In this way, in synopsis, viable performance management must incor-
porate development plans that address
• Deficits in performance
• Plans to get employees ready with the skills to complete their goals
efficiently
• Long-term development objectives
Easier said than done, how regularly do development discussions

follow the dialog on objectives and general performance? Managers
a nticipate that workers will step up to further their development plans,

but employees either would prefer not to do so or they don’t know how to
do it. The outcome is that nothing gets completed and another entire year
goes by with a development plan and is then quickly disregarded at review
time. Sound familiar?
What would you be able to do about it? The answer lies in WIFM
(what’s in it for me). Development plans should bolster the accomplish-
ment of objectives (manager WIFM) and fuse employee development
objectives (worker WIFM).
The development plan should be a live record that is referred to during
progress audits and revised as required precisely like the objectives. The
development plan may be assigned to the employee; however, the man-
ager has a critical role in supporting the employee by removing snags and
allocating resources as needed. Development is never a lone movement; it
requires both the worker and manager to cooperate.
2.6.6 SKILLFUL MANAGERS (WITH THE CORRECT

ABILITIES)
The best procedure will fizzle out if managers don’t have the right abilities
to have powerful performance management talks. A profitable discussion
where workers feel tuned in and part of the procedure will empower work-
ers and spur them on to accomplish their objectives and more. On the other
hand, a lacking discussion where employees feel overlooked and treated
unreasonably will demotivate them and at worst convince them that there
is no need for them, resulting in resignations and high cost turnover.
Remember that employees experience organization culture in the way
that their managers manage them. It is not the organization vision and
qualities that impact their experience; generally, these are remote from the
normal worker. It has been said that individuals leave managers and not
organizations. Managers need to experience the organization vision and
qualities in the way they manage. Therefore, what do manages need to
do with a specific end goal to have an effective performance management
discussion?
The attributes required for this look especially like other powerful
communication skills:
• Dynamic listening
• Illustrating (open questions)
• Briefing and summarizing
• Inspiring and encouraging
In addition, the following skills are also essential:
• Delivering feedback including the skill to

 Politely encounter wrong ideas processes
 Manage anticipations
• Managing—raising the correct questions so that workers find their

specific solutions
• Boost involvement in identifying objectives and development plans
without eliminating responsibility
Managers can enhance these abilities through training, yet the most
ideal approach to refine these is through training and by accepting instruc-
tion and criticism from their own specific line managers. A difficult
request? Be that as it may, what replaces performance management? Is it
sufficiently appropriate to accept that individuals know what is expected
from them in their jobs? You might have heard it mentioned casually:
“They are experts; they know what to do!” Have you inquired? Similarly,
do you ensure that your workers know what to do?
In the event that you need to unlock performance, great performance
management is the initial step.
Keep in mind, the structure and plan of your evaluation documenta-
tion is not as essential as ensuring that
• Top managers are dedicated to the process.

• Objectives are properly clear.
• Feedback is well adjusted.
• Progress is monitored.
• Development plans are appropriately involved in the process.
• Managers have the right abilities to support the process.
CHAPTER 3
Construction Design and

Plan Review
3.1 INTRODUCTION
When planning projects, it is vital to understand the connection between

design and construction. These procedures can best be seen as an inte-
grated framework. Broadly, design is depiction of a new facility, normally
represented by definite plans and specifications. Construction planning is
a procedure of distinguishing activities and resources needed to convert
the design into a physical structure. Therefore, construction is the exe-
cution of a plan visualized by designers and experts. In both design and
construction, various operational assignments must be performed with
varying degrees of prioritization and connections among the different
undertakings.
Several attributes are unique to the planning of building facilities
and should be remembered even at the beginning of the project life cycle.
These incorporate the following:
• Almost each facility is specifically designed and constructed and

frequently requires time to be finished.
• Both the design and construction of a structure must fulfill the con-
ditions mandatory to a particular site.
• Because each project is site specific, its implementation is impacted
by general, social, and other location conditions, for example,
climate, worker supply, neighborhood construction regulations,

and so on.
• Since the service life of a structure is long, the expectation of its
future maintenance requirements is characteristically troublesome.
• Because of fast-changing technology and market demands, changes
of configuration design during construction are normal.
Within an integrated framework, the planning arrangements for both

design and construction can continue at the same time, considering dif-
ferent alternatives, which are appealing from the two perspectives and
hence eliminating the need for major changes through value engineering.
Besides, the audit of designs as to their constructability can be done as the
project advances from planning to design. For instance, if the sequence of
assembling a facility is separately deemed as a piece of the overall struc-
tural design, the effects of the design on construction work and on getting
subtle elements properly assembled together can be expected.
3.2 CONSTRUCTION DESIGN
3.2.1 DEVELOPING CONSTRUCTION DESIGN
Whereas the conceptual design process might be formal or casual, it can

be portrayed by a progression of activities: formulation, analysis, search,
decision, specification, and adjustment. In any case, at the early stage of
the development of a new project, these activities are very intuitive and
interactive. Numerous iterations of redesign are relied upon to refine the
functional needs, design concepts, and budgetary imperatives, despite the
fact that the logical instruments connected to the arrangement of the issue
at this stage might be exceptionally unrefined.
The progression of activities made in the conceptual design process
might be portrayed as follows:
• Formulation refers to the definition or depiction of a design issue

in broad terms through the blend of thoughts portraying alternative
facilities.
• Analysis refines the issue definition by isolating critical from fringe
data and by pulling together the basic detail. Understanding and
forecast are generally required as a feature of the analysis.
• Search includes collecting potential answers for carrying out the
predefined capacities and fulfilling the client necessities.
• Decision implies that each of the potential arrangements is assessed
and contrasted with the options until the best arrangement is
attained.
• Specification is to portray the picked arrangement in a format,
which contains adequate detail for implementation.
• Modification refers to the adjustment in the arrangement or rede-
sign if the arrangement is observed to be wanting or if new data is
found during the design process.
Construction Design and Plan Review • 49
While a project progresses from conceptual planning to detailed

design, the design procedure turns out to be more formal. Overall, the
activities of formulation, analysis, search, decision, specification, and
modification still hold; however, in detailed design, they are more spe-
cific with fewer permutations. The design strategy thus formalized can be
applied to an assortment of design problems.
3.2.2 REVIEWING CONSTRUCTION DESIGN
Perfect design is not a subjective idea: It can be quantified and measured.

Ideas of design quality extend beyond taste, style, and appearance to
include functionality, sustainability, reaction to context, structural integ-
rity, flexibility in use, and cost efficiency, both throughout construction
and over the life of the structure.
3.2.2.1 The Purpose of Design Review
Design review is a critical aspect of the construction process in managing

design quality and supporting performance to enhance the design quality
of construction projects. There is a belief among construction experts that
great design is vital to ensure value for money. Design audit is a necessary
apparatus within a scope of activities recognized to enhance the design
quality and sustainability of the construction works. Design review offers
an opportunity to seek additional independent expertise at key phases of
project planning and delivery.
3.2.2.2 What Is Design Review?
Design review is a method for assessing and observing design results.

Contingent upon the kind of project and the program arrangements, design
review can be utilized for:
• Analyzing and evaluating conceptual constructed shape or site

alternatives
• Identifying project risks potentially emerging from low-quality
design choices
• Providing specialist feedback on projects all through the design
procedure
• Observing and auditing of post-occupancy performance
Design review includes understanding the design vision for a project

and evaluating how this vision is executed on the ground. The process
can be helpful for building process and for urban and landscape design,
master planning, and structure planning. Proposals should be subject to at
least two design reviews at key stages through the project schedule. The
staging, scope of project stakeholders, and the scope of a design review
will change from project to project; however, utilization of the applicable
design standard as a major aspect of the project briefing is an important
prerequisite.
With early engagement, consultants can help project managers with
constructing a proper design review process for singular projects.
3.2.2.3 Who Participates?
Design review typically encompasses the following stakeholders:
• Principal designers of the consultant group

• Project management team
• Representatives of the appointing agency
• Extra consultant team members (where needed)
• Construction and site engineers
3.2.2.4 What Is Good Design?
Good design is about functionality, performance, and construction quality

as much as about genius and creativity. Good design implies that struc-
tures and spaces work in a way that adds to the personal satisfaction for
the individuals who utilize them. Good design enhances the performance
of public services, gives a feeling of identity and community, can enhance
client health and security, and helps in achieving a sustainable future. Good
design gives value for money and also better structures, especially when
consideration is paid to the full expenditure during a building’s lifetime.
3.2.2.5 When Does Design Review Take Place?
In general, design review can have the most effect at the earliest phases
of the design process throughout concept and schematic design where
the brief is being examined through initiating formal reactions and the
key strategic design goal is being set up. Design review can likewise be
h elpful in the project planning stage, particularly where master planning

may be required as a major aspect of business case or project definition
plan improvement. It is imperative that the scheduling of design reviews
is considered carefully keeping in mind the end goal must be to have
the maximum impact on the project’s design quality without obstructing
the project schedule. This implies that design reviews should be facili-
tated with project deliverables. Consequently, it is advised to schedule at
least two design reviews. The recommended timing of these is as per the
following:
• Schematic/concept design phase (master plan and initial construc-

tion form)
• Design development stage (preceding the submission of the Design
Development report)
Continuous reviews to observe progress might be scheduled as appro-

priate; however, in all cases they are best scheduled when design changes
can still be managed. Project managers are asked to advise the design team
concerning the project timeline and, through further counsel, slate appro-
priate dates for the reviews at the earliest opportunity. They can likewise
help with getting the briefing ready and request records so that design
reviews can be scheduled as right on time as possible within the project
delivery phase. The design review group will perform technical audits and
organize archive document preceding tender process, and they need to
likewise be consulted for the scheduling of reviews.
3.2.2.6 How to Ensure Design Reviews Can Make the Greatest

Impact?
1. Set proper design quality objectives for the project at the earliest
opportunity.
2. Support the design team by guidance in preparing brief and request
documents.
3. Include the prescribed design standards in briefing documentation.
4. Inform consultants by laying down the design review process and
design quality requirements for the most part within briefing doc-
uments.
5. Schedule design reviews in the early project stages to synchronize
with project deliverables.
6. Save adequate time in the program for reactions to design review
detailing.
3.2.2.7 How Does Design Review Work?
During design review, the consultant can give independent expert advice
to commissioning and client representatives and consultants on the design
quality of a project, in light of the guidelines contained in the pertinent
design standards. The design review process comprises of a formal pre-
sentation to the lead design consultant followed by developing a design
review report extend to the project general manager. The formal presenta-
tion incorporates:
• A visual presentation of the proposition by the design team to the

project manager
• An open discussion between the design consultant, the general
manager, and different participants to illuminate the design expec-
tation and reaction
• A closed meeting where the project team and general manager may
examine any further issues (where required)
It is expected that reviews will take in the vicinity of 1 to 2 hours

altogether depending upon the size of the project and the issues for dis-
cussion. Notes should be taken by the project manager team to record real
and major decisions, results, and recommendations (in case they should be
given within the design review meeting). To encourage appropriate prepa-
ration for a review, the project manager is asked to circulate the project
brief, design drawings, and duplicates of pertinent design reports to the
partners no less than five working days before the design review meeting.
3.2.2.8 Design Review Report
Within a week of every review, the design review team will refer written
feedback to the project manager as a design review report. The summary
and outcomes of the report will be developed around the key standards of
the prescribed design standards. The report is to be utilized as a source of
perspective in subsequent reviews as well as continuous design quality
follow-up.
3.2.2.9 Vital Information for Consultants
In the underlying design presentation, the project brief as well as the site
conditions should be illustrated preceding a description of the project.
Project descriptions should progress from the general to the specific. Ide-
ally, a clear definition of the project vision and architectural/urban design
standards is specified before a more itemized record of the proposition
is taken up. Presentation material will rely upon the project phase, its
size, and setting. Project deliverables need to give a general guideline
concerning what might be normal as a feature of the presentation. Some
material may not be unequivocally required as a major aspect of project
deliverables, but may be beneficial to clarify decision making within a
design review. For example, charts exhibiting how the design team has
progressed from an investigation of site conditions and briefing material to
introductory site planning and formal decisions are imperative.
It is vital that consultants demonstrate their insight and interpretation
of the project site in connection to its surrounding environment. Site plans,
sections, and elevations, should indicate clearly the following:
• Which parts of the site are built on, demonstrating unmistakably

existing structures to be maintained, existing structures to be dev-
astated, and new structures
• The area of land in the client’s possession/control
• The boundaries between the public and private domain
• Adjacent facilities and urban setting demonstrating the connection
of the site to surrounding regions and to open transport and road
networks
• The area and degree of current structures and storage areas
• Consideration of views to and from the site
• How individuals and vehicles access and move through the site
• The conditions of the site with respect to critical natural conditions
All plans, sections, and elevations of proposed structures and draw-

ings by and large must be annotated adequately to clarify rationale behind
spaces and rooms, orientation, and scale. Detailed drawings are required
to demonstrate effects of materials and structural configurations at the
human scale. The utilization of models to clarify projects is emphatically
endorsed. At the early phases of a project, even rough sketch models can be
as important as three-dimensional perspectives or Building Information
Modeling (BIM) style.
Evaluation of design quality will be used as a base for the predefined
design standards and the project’s briefing documents including the
request for proposal (RFP) and project definition plan material. Where
design benchmarking has likewise been produced in the project planning
stage, this material may likewise be utilized in design reviews. In some
conditions where the project falls within a spatial region, zone, or devel-
opment control with a particular arrangement of design rules or desired
design quality standards, the project manager may likewise utilize this
material as a major aspect of the design review process.
3.3 CONSTRUCTION PLAN
The enhancement of a construction plan is practically equivalent to the

development of a good facility design. The planner must measure the cost
and consistent quality of various alternatives while simultaneously guar-
anteeing technical feasibility. Construction planning is sometimes difficult
since the construction process is dynamic, as the site and the physical
structure change after some time as construction progresses. Then again,
construction operations have a tendency to be genuinely standard starting
with one project and moving onto the next, while facility or foundation
details may vary extensively from one facility to the next.
Formulating a reasonable construction plan is an exceedingly difficult
issue. There are various conceivable plans available for any given proj-
ect. While past experience is a practical manual for construction planning,
each project usually has unique issues or expectations that may require
extensive creativity and ingenuity to resolve. Unfortunately, it is very hard
to give clear guidelines to frame reliable plans for all conditions. There are
some suggestions that can be utilized to depict the attributes of practical
plans; however, this does not necessarily help a planner to find a reason-
able plan. However, as in the design process, techniques of decomposition
in which planning is divided into subcategories and hierarchical planning;
general exercises are more than once subdivided into specific tasks can be
readily adopted as a rule.
From the viewpoint of construction contractors or the construction
divisions of large firms, the planning process for construction projects
comprises of three phases that occur between the time that a planner
begins the plan for the construction of a facility to the time that the assess-
ment of the final part of the construction process is done.
The estimation stage includes improvement in the cost and duration
estimate for the construction of a facility as a major aspect of the propo-
sition of a contractor to an owner. It is the stage in which assumptions of
resource responsibility regarding the vital activities to construct a facility
are made by a planner. A cautious and thorough analysis of various con-
ditions dictated by the construction project design and by site attributes
are mulled over to decide the best estimate. The ability of a contractor
depends on this estimate to obtain a job as well as to build the facility

with the highest benefit or profit. The planner needs to find the time–cost
combination that will enable the contractor to be effective in his endeavor.
The outcome of a high estimate could lead to losing the job, and the con-
sequence of a low estimate could be to win the job, but make a loss in the
construction process. When changes are performed, they must enhance the
estimate, considering present impact as well as future results of succeed-
ing activities. From time to time, there is an instance when the construc-
tion process precisely mirrors the estimate offered to the proprietor/owner.
In the monitoring and control phase of the construction process, the
construction manager needs to monitor the two activities’ durations and
ongoing costs. It is foolish to assume that if the construction of the facility
is on schedule or ahead of schedule, the cost will likewise be per estimate
or lower than the estimate, particularly if several changes are performed.
Consistent assessment is essential until the point when the construction of
the facility is finished. At the point when work is begun in the construction
process and information about it is given to the planner, the third phase of
the planning process can start.
The evaluation phase is the one in which outcomes of the construction
process are compared with against the estimate. A planner manages this
uncertainty throughout the estimation stage. Only when the result of the
construction process is known, one can assess the quality of the estimate.
It is in this last phase of the planning process that one decides whether
the propositions were right. On the off chance that they were not or if
new constraints arise, one must present related modifications in future
planning.
3.3.1 CONSTRUCTION PLAN/SCHEDULE REVIEW
This construction-scheduling process concentrates on the items the con-

struction-scheduling engineer needs to analyze, not the well-ordered pro-
cedures of how to utilize Primavera to obtain the data. (The well-ordered
Primavera procedures can be gotten from different sources.)
The construction scheduling will reveal a detailed review of the
final design submission. The construction-scheduling engineers will be
given duplicates of all needed contract documents, including conditions,
designs, specifications, estimates, and schedules. They won’t utilize the
contract documents to carry out quality control activities; they require all
the documents to completely comprehend what is incorporated into the
project.
The construction-scheduling engineer audits project schedules to

give information and feedback on the whole schedule, including remarks
from a constructability perspective. Scheduling engineers work with
the designer to give counsel relevant to the schedule from preliminary
engineering through final design. Project schedules are reviewed at the
final design and plan, specification, and estimate (PS&E) submissions.
There is an audit for final design remark compliance and dates need to be
checked accordingly.
Construction scheduling confirms the schedule is appropriate for the
size and nature of the project. Features of standard components to be con-
sidered, best practices, and standard coding of materials that need to be
evaluated are depicted here and point by point in the scheduling manual.
3.3.1.1 Standard Factors To Be Considered
While reviewing the project schedule throughout periodic meetings with

the project manager and designer, the construction-scheduling engineer
concentrates on issues relevant to constructability. Among the rundown of
routine considerations, the following should be considered:
• Critical path reasonableness

• Working drawing timeframes
• Long lead items
• Constraints
• Activity logic
• Ensure the substantial completion and completion dates represented
in the schedule are in concurrence with the dates represented in the
specifications
• Ensure utility notification and work duration timeframes repre-
sented in the schedule fit with the dates and time allotment dis-
played in the specifications
There are standard activities that must be performed by the construc-

tion-scheduling engineer while reviewing project schedules:
• The construction-scheduling analyst must get two duplicates of

the schedule, a printed duplicate and an electronic one that must
contain a backup of the progress schedule.
• The construction-scheduling engineer loads the schedule on Prima-
vera and audits the schedule by opening a duplicate of the schedule.
The construction-scheduling engineer should not work on the origi-
nal duplicate of the document.
• The construction-scheduling engineer reviews the project con-

straints and the calendars. (Refer to the scheduling manual for
details on the constraints, layouts, and designer-formatted road,
bridge, and specialty calendars.)
• The construction-scheduling engineer audits the schedule coding.
The activities are
 Sort and audit schedule by coding
 Review different columns
 Check logic and constructability
• The construction-scheduling engineer audits the schedule details

and narrative. The requirements of schedule narrative are:
 Estimated production rates
 Estimated workforce (e.g., number of crews, size, crew type)
 Estimated number of workdays for project activities during the
specific season (e.g., the authorities might have specific dates

for construction work shutdown)
 Permit requisites
 Utility necessities
 Community duties
 Lead time for special materials
 Detours and expected time allotment
 Any basic points of reference, milestones/intervals, and comple-
tion dates (e.g., street/slope openings, critical phases)

 Any expected issues meeting the schedule (ROW, utilities, etc.)
 Definition of any acceleration performed on the project’s
schedule
 The number of working days for every operation and activity
• He or she must run the Primavera Error Report.
3.3.1.2 List of Standard Factors
The constructability-scheduling engineer needs to consider the following

standard elements while looking into a construction schedule:
• Scheduling the promotion of small, short-duration projects so as to

enable construction to be finished in one construction season
• Can the schedule be reduced? Request designer to demonstrate a
crashed schedule (overtime, multiple shifts, and weekend work)
with related costs
• Multiyear projects need cost-loaded schedules
• Seasonal limitations of materials such as concrete, Hot Mix Asphalt,
paints, etc.
• Moving and conveying equipment

• No natural gas service interruptions
• Availability of surrounding areas
• Work hour limitations because of organizing and traffic volumes
• Maritime, or railroad activity
• Phased construction
• Concrete curing time
• Embankment settlement time
• Coordination with other ventures
• Season’s shutdown
• Working drawing preparation and endorsements (each treated inde-
pendently)
• Availability, manufacture, and conveyance of materials. This
includes an examination of any special order requirements
• Permit constraints (fish spawning, etc.)
• Work zone limitations (wetlands, historic sites, parkland, etc.)
• Hazardous material excavation and disposal
• Payment limitations because of limits in multiyear funding
• Work restrictions because of local activities or holiday seasons
• Local noise limitation mandates
• Compliance with Authorities.
3.3.1.3 Scheduling Best Practices
Three basic factors make program management scheduling work:
• Clearly defined activities

• Realistic timeframes
• Good rationale and logic
Other best practices include the following:
• Negative lags are not allowed.

• Do not utilize a finish-to-start relationship with a lag. An activity
must be added to represent the lag time.
• A project should have only one start and one end. All activities
should have a predecessor and successor with the exception of the
project’s start and end milestones. No “open ends” will be allowed.
• “Suspension of dates” won’t be allowed. An activity must be
included.
• If an activity has a start-to-start relationship, it should be closed with

a finish-to-finish or finish-to-start relationship (no open c losures).
• The completion date of the critical path method schedule should
be the completion date in the project’s special provisions, which
might be input as a finish milestone with a late finish constraint.
If required, transitional milestones (interim completion dates)
required in the contract should appear in logical sequence and input
as either the “start-no-earlier-than” or “complete-no-later-than”
date. Compulsory finishes and starts should not be utilized.
• When updating, all “out of sequence” activities should be remedied
to reflect the present construction operations.
• Original durations should not be changed from the agreed baseline
schedule.
3.3.1.4 Standard Coding Items That Should Be Audited
As a method for monitoring progress schedules, projects’ parties have to

agree on creating specialized regular coding structures and systems to be
used from design through construction. The most recent standard coding
items should be incorporated into the Primavera layout. Scheduling man-
uals for a list of standard coding items could be updated from previous
projects and the construction-scheduling engineer should consider those
when reviewing project schedules.
CHAPTER 4
Contracting and Procurement
4.1 INTRODUCTION
At the initial stage of a project, once a project manager is chosen, the prin-
cipal concern that faces the owner is to decide the contract strategy that
best suits the project objectives. Contract strategy implies choosing orga-
nizational and contractual binding strategies required for the implementa-
tion of a particular project. The progress of the contract strategy involves
an extensive appraisal of the decisions available for the management of
design and construction to increase the probability of accomplishing proj-
ect objectives. The extent of such contracts is wide, from a straightforward
purchase of a standard article to multimillion-pound projects. The size and
complexity of the contract matter vary per the requirements.
An appropriate contract strategy for a project includes five important
decisions:
• Identifying the project objectives and constraints

• Selecting an appropriate project delivery technique
• Selecting an appropriate contract form/type
• Identifying contract administration practices
4.2 CONTRACT DEFINITION
A contract is distinct as an agreement prepared between at least two parties,

which is enforceable by law to give something in return for something else
from another party. Contracts can be exceptionally straightforward or they
might be long and confusing legal documents. When a contract is correctly
prepared, it is legitimately binding. The two parties are required to comply
with the various commitments they have undertaken, as c ommunicated
in the mutually agreed items of the contract. A contract, accordingly, is
critical to safeguard the rights of both client and contractor. As indicated
by its basic definition, a contract is an agreement enforceable by law; yet

not all agreements are contracts. Some components must be present before
an agreement becomes a contract. These components are:
• Competent parties: For an agreement to be a contract, there must

be at least two parties. Keeping in mind the definition of the term,
it must have a specific legitimate standing.
• Appropriate subject matter: For the topic of a contract to be appro-
priate, the primary necessity is that it contains the rights and com-
mitments of each party. Second, the motivation behind the contract
must not jeopardize the law.
• Attention: There must be a legitimate and significant consideration
given by the two parties, a consideration regularly called “some-
thing for something.” A consideration must also be conceivable.
• Agreement: For a substantial contract, there must be a mutual agree-
ment. An agreement is considered to have been achieved when an
offer made by one party is acknowledged by the other party. The
two parties must want and plan their deal to be enforceable by law.
• Appropriate form: The terms of a contract must be composed with
the goal that the two parties are certain of what their rights and
obligations are.
• Consent of the parties: The agreement must be free from misrepre-
sentation, duress, undue impact, and so on. The primary steps to be
taken before awarding a contract are depicted in Figure 4.1.
Project definition
Scope identification
Contract type selection
Tender document preparation
Invitation for bidders

OR Rebid
Tender inquiry meeting
Bid evaluation
Awarding contract
Figure 4.1. Steps of contracting process.

Contracting and Procurement • 63
4.3 DECIDING ON CONTRACT TYPE
The choice of contract type to be utilized for a construction project is

decided by the owner, following up on the counsel of his engineer and his
legitimate consultant. The determination must meet the owner’s objec-
tives and consider the imperatives that relate to the project.
Consultants and contractors should be completely informed of the
project objectives and limitations. The scope and the nature of the project
will basically influence the decision of the type of contract.
4.3.1 PROJECT OBJECTIVES
The client will have various general objectives. These objectives might be
of essential as well as auxiliary significance. Essential objectives include
effective scope, time, and cost objectives.
(a) Project scope: The project scope describes the extent or the vol-
ume that the contract covers. Any additions or omissions in the life
of the project will increase or reduce the quantity of work included.
Therefore, any adjustments in design must be discussed precisely,
regardless of whether they influence the scope of the project.
(b) Time: The scope and time are firmly interrelated. Choices should
mostly be made based on the impact of the increasing or decreas-
ing scope on time. On the off chance that the completion date of a
project is critical, at that point, expanding the scope will require an
accelerated plan. The additional cost related with this acceleration
must be evaluated and quantified.
(c) Price: The cost of a project is firmly identified with scope and time.
The impact of the contract on price and the different incentives and
penalties that can keep price stable must be discussed and clearly
characterized and documented.
Secondary objectives could emerge in a construction project and

would have a significant impact on contract strategy decisions. The
following are examples of secondary objectives:
• Allocation and compensation for risk

• Training of the employer’s team
• Decision of labor intensive construction
• Transfer of technology
• Engagement of contractor in design
• Engagement of client in contract management

• Protection of the environment
• Usage of local resources
4.3.2 PROJECT CONSTRAINTS
All construction projects have constraints that affect the accomplishment

of the project objectives. Therefore, these constraints need to be con-
sidered while picking a suitable contract technique. There are various
constraints and the following are some examples:
• Technique of tendering
• Availability of funds
• Project locality
• Availability of contractual incentives
• Targeted dates of the project
• Availability of resources
• Recurrent working
• Availability of design changes
• Number of contractors eager or able to tender
• Inflation
Three primary factors impacting the selection of a particular contract

are incentive, risk sharing, and flexibility.
4.4 PROJECT DELIVERY METHODS
The project delivery method indicates what project parties are involved in
the project and how they connect with each other and is therefore called
project organizational structure. The decision of a project organizational
structure must be related to project objectives and constraints. It can be
strengthened by considering the following factors:
• Decision of the design team to form in-house resources, external

consultants, or contractors
• Restrictions in using combination of organizational structures of
other projects within the project
• Size and nature of the work packages within the project
• Procedure of construction supervision
• Expertise, which the client desires to be involved in the project
At the point when plans are finished and the owner is involved in reduc-
ing the cost, the employment of competitive bids is proposed. C ompetitive
bidding leads to the type of contracting that many know about.
A negotiated contract must be utilized when construction has to begin
before planning is completed or when the numerous variables of the
project make an accurate estimate impossible. When many changes are
projected and when investigation and supervision are impossible effec-
tively, the negotiated kind of contract should be utilized. The different
project delivery methods can be summarized as follows:
4.4.1 TRADITIONAL APPROACH
This is the most well-known approach in construction projects in which

the design must be finished before construction can begin. Design and
construction are generally managed by two distinct parties who collabo-
rate directly and independently with the owner. The advantages and disad-
vantages of this approach are summarized as follows:
• Advantages
 Cost competitiveness
 Total cost is known before construction begins
 Well-documented approach utilized in most government
projects
• Disadvantages
 Long duration
 Design will not benefit from construction practices and expertise
 Conflicts between owner, contractor, and Architecture/Engineer
(A/E)
Therefore, this strategy is appropriate much of the time where the

project is clearly defined, design is completed, time frame is not reduced,
and major changes may not happen during construction.
4.4.2 DIRECT LABOR
In this approach, the owner’s organization completes both the design and
construction using its in-house labor force.
• Both the design and the construction completed by the owner

• Used by large entities
• Most appropriate for small projects.

• May use consultants for some specialized tasks
• Can be used when expertise is available
• Inadequate scope definition
• Low-risk projects
4.4.3 DESIGN-BUILD
In this approach, a single organization is in charge of handling both design

and construction, providing relevant “expertise” for the project when
required. The advantages and disadvantages of this approach are summa-
rized as follows:
• Advantages
 Single contract that includes the expertise
 Used for fast-track projects in order to reduce duration
 Owner involvement is reduced
 Better coordination between design and construction and easier
to make changes
• Disadvantages
 Cost may not be known until end of construction
 High risk to contractor and more cost for owner
 Design-build company may make money at the expense of
quality
The employment of this approach, therefore, must be considered

when contractors offer specific design/construction/expertise or when
design is clearly impacted by the technique of construction.
4.4.4 TURNKEY
This approach is like the design-build approach, but with the organization
being in charge of design, construction, skills (assuming any), and project
financing. Payment by owner is made toward the completion (when the
contractor turns over the “key”). An illustration is franchise projects in
which a branch of an eatery chain needs to maintain the same design, con-
struction quality, and food service quality.
4.4.5 BUILD-OPERATE-TRANSFER (BOT)
In this approach, a business organization is in charge of providing the

design, construction, long-term financing, and temporary operation of the
project. Toward the end of the operation time frame, which can be many
years, operation of the project is handed to the owner. This approach has
been broadly utilized in recent years and is expected to continue. A case
of its utilization is in expressways and freeways. A consortium of orga-
nizations shares the cost (design, construction, financing, operation, and
maintenance) and the benefits picked up from user fees for a stipulated
number of years. A little later, the work comes to the government for pub-
lic ownership. This approach has additionally been utilized in substantial
infrastructure projects financed by different international organizations in
several countries that can’t afford the cost of the high speculation cost of
such projects.
4.4.6 PROFESSIONAL CONSTRUCTION MANAGEMENT

(PCM)
In this approach, the owner selects a PCM association (otherwise called

construction management association) to manage and coordinate the design
and construction phases of a project utilizing a teamwork approach. The
design might be conducted by specialist design firms and sometimes by
the PCM association. With extensive coordination between the involved
parties, innovative methodologies of combining design and construction
(i.e., optimizing time, quality, and cost) can be followed. The PCM asso-
ciation practice a professional relationship like that of the consultants in
the conventional approach.
The services provided by the PCM association cover those generally
handled by the architect, the engineer, and the contractor. This may
comprise programming and management of design; cost estimating and
financial arrangements; preparation of tender documents; tender analysis
and determination of contractors; choice of techniques for construction;
suggestions on construction financial aspects; planning and scheduling
construction activities; materials procurement and delivery expedition;
arrangement for site security, cleanup, and temporary utilities; super-
vision and control of contractors; construction quality assurance; cost
control; costing of variations and assessment of claims; and certifica-
tion of interim and final payments to contractors. The utilization of PCM
approach, therefore, should be considered when there is a requirement for

time optimization and flexibility for changing orders, and the owner has
insufficient management resources.
4.4.7 CONTRACTUAL RELATIONSHIPS
Within each project delivery strategy, the contractual binding connections

among the project parties can take different relationships and the owner
needs to settle on a choice in regard to the best possible arrangement that
suits the project and the parties included. The contracts related to different
project delivery strategies are shown in Figure 4.2.
4.5 TYPES OF CONTRACTS
There are various types of contracts that may be employed in the construc-
tion industry. Construction contracts are categorized according to different
features. They may be categorized according to the scheme of payment to
the contractor. When payment is established on charges, which are offered
by the contractor in his tender, they are referred to as cost-based contracts.
Examples of this scheme are cost-reimbursable and target cost contracts.
Contracts may be categorized in terms of the risk associated. The range of
risk varies from a fixed-price contract to a totally risk-free cost-reimburs-
able contract at the other end.
4.5.1 LUMP-SUM CONTRACT
A single tendered price is given for the completion of fixed work as

per the direction of the client by a specific date. Payment might be
organized at intervals until completion. The contract has an extremely
restricted flexibility for design changes. The tendered price may
include high-risk contingency and high level of financing. Where sig-
nificant risk has been identified with the contractor, this contract may
result in cost cutting, minor claims, or bankruptcy. Contract final price
is recognized at tender. A lump-sum contract would appear to avert
risks for the client, whereas actually it just changes them. A critical
risk to the client is that of not accepting competitive bids from worthy
contractors who may maintain a safe distance from a high-risk lump-
sum contract.
Carries out the project with own resources and/or utilizes
Direct
Force
subcontractors and sub subs.
Traditi- Contracts with an architect/consultant for c onsultancy

onal services and with general contractors (GCs) for
implementation activities. GCs may accordingly utilize
Contracts with one organization for handling both
Design-Build
(Turnkey)
consultancy services and implementation activities.

The organization can in turn utilize subcontractors
and sub subs.
Contracts with three parties: an architect for design pur-

poses; a construction manager (CM) for project manage-
Agent
CM
ment purposes; and GCs for implementation activities.

GCs can in turn utilize subcontractors and sub subs.
OWNER
Contracts similar to agent CM with the only difference

Design
that here a single firm handles both design and manage-

CM
ment activities. So the number of contracts is reduced to

two instead of three.
Contracts with an architect for design purposes and with a
Contractor
CM for both project management purposes and implemen-

CM
tation activities. Then CM shall contract with GCs, who

may utilize subcontractors and sub subs for implementa-
tion activities.
Acts as a CM and at the same time contracts with an
Owner
architect/consultant for consultancy services and with GCs

CM
for implementation activities. GCs may accordingly utilize

Acts as a CM and an architect at the same time and
Design/CM
contracts with GCs for implementation activities. GCs

Owner/
may accordingly utilize subcontractors and sub subs.
Figure 4.2. Contractual relationships.
This contract might be utilized for a turnkey construction. It is suit-

able when work is represented in detail, few changed are anticipated, level
of risk is low and quantifiable, and client does not wish to be associated
with the management of the project.
4.5.2 ADMEASUREMENT CONTRACT
In this sort of contracting, items of work are determined in bills of quanti-

ties or schedules of rates. The contractor at that point determines rates for
every item. The rates involve risk contingency. Payment is paid monthly
for all work finished through the month. The contract offers a right for the
client to present changes in the work described in the tender documents.
The contractor can claim additional payment for any adjustments in the
work content of the contract. Claims resolution is extremely troublesome
since the client has no information of actual cost or hidden contingency.
Tender price is generally increased by changes and claims. Two types
of admeasurement contracts are generally utilized: bill of quantities and
schedule of rates.
• Bill of quantities contract: Tenderers include rates for every item

of the estimated quantities of work. The quantities are remeasured
over the span of the contract, valued at the tendered rates, and the
contract price modified accordingly.
• Schedule of rates contract: It contains inaccurate quantities of
work, potentially with upper and lower possible breaking points
or limits. Therefore, it is normal for separate rates to be quoted for
labor, equipment, and materials. The contract price is determined
by measuring the man-hours, equipment-hours, and the quantities
of materials actually used, and then pricing them at the tendered
price. This agreement is most appropriate for projects with repeti-
tive items or activities.
The admeasurement contract is easily understood and utilized. It can

be utilized when practically no changes are expected, level of risk is low
and quantifiable, and design and construction are coordinated.
4.5.3 COST-REIMBURSABLE CONTRACT (COST-PLUS

CONTRACT)
The contractor is reimbursed for actual cost in addition to a special fee for
head office overheads and profit, and no special payment for risk. Pay-
ment might be made monthly in advance. The contract includes a high
flexibility level for design changes. Final price relies upon changes and
the degree to which risks arise. The contractor must make every one of
his records and accounts available for assessment by the client or by some
agreed third party. The fee might be a fixed sum or a percentage of real
costs. This contract has no direct money-related incentives for the con-
tractor to perform effectively. It might be utilized when it is required for
design to continue simultaneously with construction and when the client
wishes to be engaged in contract management.
4.5.4 TARGET COST CONTRACT
Cost targets might be brought into cost-reimbursable contracts. In

addition to the reimbursement of actual cost plus percentage fee, the
contractor will be paid a share for any saving in target and real cost,
while the amount will be decreased if actual cost exceeds the target.
The target figure must be practical and the incentive must be adequate
to produce the desired motivation. Identified risk may be excluded from
the tendered target cost. When this happens, the target cost is modified
as required and the client pays the actual cost indicated by the contrac-
tor. The target may likewise have adjusted for real changes in work and
cost inflation. This contract can be utilized in the same situations as the
cost-plus contract.
A concise summary of the level of risk exposed by each of the dis-
cussed contract types is represented in Figure 4.3. As shown in the figure,
competitive bidding contracts (lump sum and unit price) are among the
high-risk contracts for contractors and therefore signify a challenge in
estimating their cost and schedule at the bidding stage and before a com-
mitment is made.
Risks to owner
- Owner direct force

- Cost plus
Risks to contractor
- Guaranteed maximum
price (GMP)
- Unit price
- Lump sum
- Turnkey
Figure 4.3. Level of risk associated with various contracts.

4.5.5 TIME AND MATERIAL (T&M) CONTRACT
A T&M contract is a combination that contains features of cost-reimburs-

able and fixed-price-type arrangements. T&M contracts look like cost-
type arrangements in that they are open-ended, in light of the fact that the
full estimation of the arrangement is not characterized at the time of the
award. Thus, T&M contracts can increase the contract value as if they
are cost-reimbursable-type arrangements. Also, T&M arrangements can
resemble fixed-unit arrangements when, for instance, the unit rates are
preset by the purchaser and merchant when the two parties concede to the
rate for the category of “senior designers.”
Most common when the purchaser needs to be more in charge. It is
likewise utilized in an emergency to start work instantly when a scope of
work has not yet been finished. So impractical estimates at the time of
putting contract to appraise the duration of the work or foreseen cost, with
any level of certainty are conducted.
4.6 CONTRACT ADMINISTRATION
As discussed in the previous sections, there are various types of con-

tracts utilized for civil engineering projects. Each type has its own char-
acteristics. A contract might be created under one type, but may include
attributes of more than a single type. Numerous professional societies
and governmental organizations have taken great efforts toward the
standardization of construction contracts with the end goal that the gen-
eral outline and content are clearly decided for the different types of
construction.
4.6.1 CONTRACT DOCUMENTS
The contract is identified by the contract documents, which are produced

from the tender documents. In a logical order, these documents contain
the following:
• Input from the client (project definition)

• Output of the contract (specifications, results to be attained)
• Bill of quantities and associated charges for managing a project
• Responsibilities and processes (liability, resource allocation, time
schedule, payment conditions, change order procedures, etc.)
Contract documents are usually arranged according to the following

sequence:
• General conditions (for any project)

• Special conditions (for a special part of a project)
• Supplementary (exclusive to a given project)
• Additional terms (during bidding or negotiation)
• Agreement form (for signing very important and specific clauses)
• Modifications (during contract implementation)
The complete contract agreement usually consists of the following

documents:
• Conditions (general, special, supplementary)

• Drawings and specifications
• Bill of quantities
• Addenda
• Agreement form
• Modifications
The most important document from the legal perspective is the

agreement. It is sometimes called the contract. Since such a significant
number of documents are referred to as contract documents, agreement is
a better term for this specific document. The form of the agreement can
be standardized and utilized for many projects, or a unique document can
be created for every project. The standard form of agreement endorsed
by the American Institute of Architects has been found to be suitable and
has been utilized on many construction projects with excellent outcomes.
The form utilized for non-building ventures is usually more varying.
Many organizations possess standard forms, which are utilized on all
their projects.
Data normally incorporated into the agreement comprise three sec-
tions. The initial segment is a short introductory paragraph, which defines
the parties, displays the date of the agreement, and declares that each party
consents to what follows. The second part contains the components of the
contract and defines the work to be undertaken. The last paragraph con-
firms the agreement and gives space for signatures of the parties. In this
manner, the agreement normally consists of the following:
1. A brief introductory paragraph

2. Scope of work
3. Time for completion

4. Contract documents
5. Performance bond
6. Contractor’s insurance
7. Owner’s insurance
8. Laws, regulations, and permits
9. Payments
10. Extensions of time
11. Change orders
12. Owner’s right to terminate the work
13. Contractor’s right to terminate the work
14. Confirmation and signatures
4.6.2 CONDITIONS OF A CONTRACT
The conditions of a contract represent the rules by which the execution

of the contract is governed. They precisely define the duties, rights, and
liabilities of the two parties. They likewise set out the actions to be taken
by the parties if and when certain issues are emerge. To some extent, no
two construction contracts are the same. Similarly, no two development
contracts are really the same. In addition, identical conditions of contracts
may not be required. Notwithstanding, for work of a similar type, certain
conditions will apply for the vast majority of cases. So it is normal to say
that a standard set of conditions for a given kind of work will eliminate
the need of thoroughly considering and drafting conditions for each new
contract. By taking the standard outline and changing it to suit the prereq-
uisites of a specific contract, time and effort will be saved. The terms of a
contract legally fall into two categories:
• Conditions: They are terms defining matters essential to the con-

tract. An inability to fulfill the prerequisites of a condition is a key
violation of a fundamental commitment giving the aggrieved party
the right to
1. Terminate the contract and claim damages, or
2. Complete the contract and claim damages
• Warranties: They manage matters that are not core to the contract,
being auxiliary to the primary purposes for which the parties
contracted. A case of a warranty is the assignment of a subcon-
tractor who guarantees that the work will be performed to specific
standards.
The conditions of a contract more often than not include the following:
1. A standard set of conditions of contract appropriate to the nature of

the work included
2. A set of amendments to the forging conditions to modify them
according to the conditions of the real contract considered
3. A series of special conditions, which include the matters critical to
the contract and not managed by the standard clauses
4.6.3 THE GENERAL (STANDARD) TYPES OF CONTRACT

CONDITIONS
Standard forms are prepared mutually by proficient bodies and associations

representing contractors or by large organizations and public bodies to suit
their own particular circumstances. The goal is that a typical approach by
the parties to all contracts will be accomplished and standard interpre-
tations of risks and duties included. There are various standard types of
conditions of contract utilized as a part of civil engineering projects. The
commonly utilized ones are
Institute of Civil Engineering (ICE): This document incorporates
the types of tender, agreement, and bond. It is suitable for all civil engi-
neering and construction works. It is especially suitable for general civil
engineering work, which is performed either in the ground or in, or
nearby, water, and cares for the potential risks and claims situations. It is
additionally utilized sometimes for building works, and for mechanical
and electrical works, which are incorporated into a civil engineering or
building contract.
Federation Internationale Des Ingenieure-Conseils (FIDIC): The
conditions are developed in accordance with the international forms of the
ICE conditions. The fourth version (1987) of the conditions for works of
civil engineering and construction involves
• Part I: General conditions along with forms of tender and

agreement
• Part II: Conditions of specific requirements with guiding princi-
ples for laying down of Part II clauses
This contract is proposed for general use for works where tender-
ers are invited on an international basis; however, it is also suitable for
local contracts. The goal is to give a standardized form, which is well
r ecognized, universally perceived and acknowledged, and sufficiently

reflects the concerns of the involved parties. The general (standard) for-
mat of conditions of the contract as a rule covers the general conditions in
regulatory clauses. For instance, general conditions of the FIDIC contract
include provisions/clauses that cover the accompanying aspects:
• Definitions and interpretations

• Engineer and engineer’s representatives
• Assignment and subcontracting
• Contract documents
• General obligations and commitments
• Labor, materials, equipment, and workmanship
• Suspension
• Commencement and delays
• Defect liability
• Alternations, additions, and omissions
• Procedure of claims
• Contractors’ equipment, temporary works, and materials
• Provisional sums
• Certificates and payments
• Remedies
• Special risks
• Release for performance
• Settlement of disputes
• Notices
• Default by employer
• Changes in cost and legislation
• Currency and rates of exchange
Majority of the general contract conditions comprise one or more

clauses, which necessitate completion by the client/engineer before the
conditions are issued.
4.6.4 SPECIAL CONDITIONS OF A CONTRACT
Special conditions refer to new clauses to expand the general conditions

of a standard form. Typically, they handle subjects not addressed by the
standard form. It is generally simpler to include a special condition than
amend a standard form condition. After a new statement is prepared, it
must be ensured that no conflict or ambiguity is present. The scope of pos-

sible subjects for special conditions is substantial. They generally manage
the specifications of one contract and one site. There are a variety of situ-
ations in which a new subject might be composed:
• In the specifications part (if it is related to technical matter)

• In the site regulations part (if it deals with site administration)
• In the separate correspondence part (if it is not crucial to include it
in the formal contract)
The decision to incorporate a special condition does not depend only

on importance; the following are some typical examples of subjects for
special conditions:
• Applicable law
• Official language
• Special terms of payments
• Patents and licenses
• Cooperation with contractor on site
• Mandatory use of local labor, equipment, and material
• Payment of fair wages
• Union membership of workforce
• Prohibition of access to specified places
• Protection and disposal of historic, valuable, archaeological, and
similar discoveries on site
• Restrictions on noise levels, dust, fire hazards, and so on
• Control of demolition work, explosives, and so on
• Responsibility for payment of local taxes
• Responsibility for damage to public services
4.6.5 CONSTRUCTION CLAIMS
A construction claim refers to a request for additional payment or time

extension to which the contractor considers herself/himself entitled. There
are three main circumstances under which claims are warranted:
• Extension of time only

• Additional payment
• Both extension of time and additional payment
The main causes of construction claims may comprise, but are not
limited to, the following:
• Design change and variations

• Work acceleration by the client
• Late possession of site or late provision of working drawings
• Delays in approval and examination of work
• Change in the beginning date of a contract
• Unforeseen events and disasters
• Different ground and/or site conditions
• Late delivery of materials supplied by the client
4.7 SELECTION OF A CONTRACTOR
Choosing key staff and Construction companies that will take part in a
project is an essential action for the owner and can mean the success or
failure of a project. To large extent, the competitive bidding process has
been the principal means for contractors to get jobs. The process might be
required by law for public projects, which comprise the biggest percent-
age of all projects, aside from those in emergencies, for example, during
war or natural disasters. Under this process, a quantitative basis is utilized
to award the bid to the “least mindful bidder,” hence possibly acquiring
the lowest construction cost. The process, however, has its disadvan-
tages, including (1) disregarding critical criteria, for example, the con-
tractor’s experience and quality; (2) possibly causing construction delays
and issues if the contractor bids below cost to win the contract; and (3)
potentially contributing to antagonistic relations between the owner and
the contractor. The competitive bidding process includes three principle
stages: announcement, bid preparation, and bid evaluation.
To call bidders or announce a project, the owner must have the plan
finished and a bid package prepared and ready with all design and speci-
fication data required. The owner at that point calls for bidders or sends a
limited invitation to a list of previously selected contractors. Through the
limited invitation, the owner’s organization can lessen potential construc-
tion issues and problems by keeping away from unknown contractors who
deliberately reduce their bid prices to be awarded contracts, especially
if the project necessitates a specific experience. Owners, hence, need to
maintain a list of qualified contractors with whom they had a successful
past experience or by calling for preselection of potential contractors.
4.8 SUBCONTRACTING
Within almost all civil and construction engineering projects, a portion of

the work is subcontracted to specialty contractors, known as subcontrac-
tors. The largest part of the work is subcontracted on building projects,
with smaller portions generally subcontracted in heavy construction
projects. Construction contracts, by and large, have clauses relating to
subcontracting. Such clauses frequently limit the amount of work to be
subcontracted and for the most part allows the client the right to approve
or reject subcontractors.
The contractor who utilizes subcontractors to carry out part of the
work must be absolutely accountable for their workmanship, perfor-
mance, and general conduct with regard to the contract. Any discussion
on these matters need to be made between the primary contractor and the
client. It is the owner’s responsibility that any restrictions on subcontract-
ing must be made in the tender documents. On the off chance that the cli-
ent wishes a specific subcontractor to carry out a portion of the work, he or
she may then make such a nomination. Nominating subcontractors in such
way is valuable when work of a specialized nature warrants such action.
It is common for clients to include other restrictions on subcontracting,
through recommending the primary contractor to a list of approved sub-
contractors. This happens at the tender stage.
4.9 GOVERNING LAW CLAUSES
4.9.1 WHAT IS A GOVERNING LAW CLAUSE?
A commercial contract presents the clauses on which the contracting par-

ties will carry out business. The interpretation and impact of those clauses
may, however, differ significantly based on which country’s laws govern
them. The aim of a governing law clause is to document the parties’
decision with respect to what that law should be.
4.9.2 WHY IS A GOVERNING LAW CLAUSE IMPORTANT?
The parties’ decision of governing law will usually be applied by courts

and arbitral tribunals in countries with developed legal systems. Therefore,
by embedding a governing law clause, parties gain certainty as they recog-
nize the law that is going to employed to decide questions with respect to
their rights and commitments under the contract. This, thus, enables them
to understand their legitimate position clearly.
It is uncommon for commercial parties not to agree to a governing
law clause. Where they choose to do so exceptionally, different complex
rules exist to decide what the governing law of the contract should be.
When parties are located or works are to be performed in different juris-
dictions, deciding the governing law of the contract could be difficult.
This may lead to vulnerability as well as to time and money being wasted
arguing in the beginning of any dispute about the law that should prevail.
The issues that can emerge in such situations are demonstrated by the
remarks of Mr. Justice Mann in the English case of Apple Corps Ltd. v.
Apple Computer Inc. In that case, a dispute emerged because of the agree-
ment, which did not contain either a governing law or a jurisdiction clause.
Mr. Justice Mann stated:
The evidence before me showed that each of the parties was

overtly adamant that it did not wish to accept the other’s juris-
diction or governing law, and could reach no agreement on any
other jurisdiction or governing law. As a result, [the relevant agree-
ment] contains no governing law clause and no jurisdiction clause.
In addition, neither party wanted to give the other an advantage
in terms of where the agreement was finalized. If their intention
in doing so was to create obscurity and difficulty for lawyers to
debate in future years, they have succeeded handsomely.
4.9.3 WHAT FACTORS SHOULD YOU CONSIDER WHEN

CHOOSING THE GOVERNING LAW?
Parties of a contract are free to choose their governing law; it need not
have any connection with the location of the contracting parties or the
topic of the contract.
Practically the parties’ decision of governing law is usually straight-
forward, according to market practice or the law that they are familiar
with. Some points, however, are introduced in the following text to be
considered while deciding on the governing law:
• If the parties have selected court litigation, they will more often
than not need consistency between their governing law clause and
jurisdiction clause. For instance, if disputes are to be settled in
the Hong Kong courts, it makes sense to select Hong Kong law.
Where they are not consistent, the parties should introduce expert
evidence with regard to the foreign law before the decided courts.
So for instance, where the parties concur that their contract should
be governed by Korean law while if a dispute emerges, it will be
settled by the Singapore courts, so parties should deliver expert
evidence on Korean law all together for the Singapore court to
decide the applicable issues. This increases the cost of litigation
and there is a risk that the court will apply the foreign law erro-
neously. Another point to be considered is that where the law of
one country is decided upon however the jurisdiction of another
country court selected for dispute resolution, there might be no
assurance that the specific court selected will perceive an express
decision of law clause.
• Arbitration creates fewer problems with regard to the decision of
governing law. This is because the parties are free to select their
arbitrator(s), and so are able to ensure that they the arbitrators, are
properly stated in the governing law of the contract. All things con-
sidered, if a lesser prevailing governing law is selected, the pool of
available arbitrators will obviously be smaller.
• In certain conditions the parties’ decision of law for the contract
may also decide the law that applies to any issues emerging out of
the parties’ precontractual dealings. This may be a justifiable reason
for selecting English law, which, unlike some civil law regimes,
does not fuse a written body of law forcing an obligation of trust in
pre-contractual negotiations.
• There might be technical reasons for choosing a specific law. For
instance, one reason for selecting English law or the law of New
York in financial transactions is that they both recognize the prin-
ciple of trust.
• Ensure that you state clearly the specific legal system that you plan
to apply (e.g., refer to “New York law” instead of “U.S. law”).
• Finally (and importantly), ensure that you select a legal system that
the courts or the arbitral tribunal can contribute to. Courts will by
and large require the law of a “country” to be selected, as illustrated
by the following English cases:
 In Beximco Pharmaceuticals Ltd. v. Shamil Bank of Bahrain
EC, the governing law clause provided, “Subject to the princi-

ples of the Glorious Sharia’a, this Agreement shall be governed
by and construed in accordance with the laws of England.” The
Court of Appeal held that the only relevant governing law was
the law of England.
 In Halpern v. Halpern, there was no express choice of law, but

one of the parties argued that the agreement was governed by
Jewish law. The Court of Appeal rejected this submission: The
law of a country was needed.
Where parties need their relationship to be governed by a law other

than the law of the country, they need to incorporate a clause for arbitration.
For instance, Section 32 of the Singapore Arbitration Act 2001 explicitly
recognizes that arbitral tribunals can and ought to choose dispute resolutions
as per the law decided by the parties or, if the parties so concur, as per such
different considerations as are concurred by them or dictated by the tribunal.
It is normal for parties who have consented to arbitrate to select non-
national laws to govern their agreements. For instance, the agreement may
assign lex mercatoria (i.e., generally perceived principles common to trad-
ing nations) as the governing law, or the UNIDROIT standards, a complete
arrangement of legal standards conceived under the auspices of the United
Nations. On the other hand, the parties can engage the arbitrator to choose
matters ex aequo et bono (i.e., on the premise essentially of accomplishing
a reasonable outcome, rather than with respect to a traditional law). It is
similarly workable for parties to concur that the governing law might be the
standard common to two distinct national laws, or that certain parts of their
contract ought to be governed by one national law and other parts by a sec-
ond national law. In any case, both of these choices are discouraged, as they
can result in negative impacts, and so run the risk of generating time-con-
suming preliminary disputes and challenges to the subsequent award.
4.9.3.1 Drafting the Governing Law Clause
When commercial parties reach an agreement, a written agreement will

normally set out their “contractual” commitments. The parties may, how-
ever, additionally have commitments, which emerge out of general law
and which are not contained in the terms of the contract. These “noncon-
tractual” commitments could emerge in relation to the following:
• The period before the contract is entered into, for instance, claims
for careless and innocent misrepresentation or, in the tort of double
dealing, out of statements made in precontractual n egotiations
• The period after the contract has been entered into, for instance,
other than the commitments stated in the signed contract, one party
may obligate the other a responsibility that requires considering
certain means.
In this manner, when drafting the governing law clause, attention

must be paid whether to restrict it to the agreement itself or to broaden it
with the goal that some other noncontractual commitments pertaining to
the contract are additionally addressed. An example of a clause that tries
to do this is as follows:
This agreement, and any dispute, controversy, proceedings or

claim of whatever nature arising out of or in any way relating to
this agreement or its formation (including any non-contractual dis-
putes or claims), shall be governed by and construed in accordance
with English law.
A clause in such terms won’t ensure that any noncontractual claims

between the parties are consistently governed by English law. However,
adopting such language can increase the likelihood of parties’ noncontrac-
tual obligations being governed by the law recognized in the governing
law clause. This, thus, will enable parties to analyze their legal relation-
ships with more certainty and hopefully reduce time and money spent con-
tending over which law will apply.
4.10 CONSTRUCTION CHANGE ORDER AND

VARIATION
A change order or variation request distinguishes a potential change in

scope from what is stated in the project contract. Each request should con-
cisely express the extent and implications of the adjustment in design or
scope of work. This gives an unmistakable baseline to the resulting discus-
sions between project parties.
Change orders usually begin with the project manager or design team
and are referred to the project owner. Variation requests originate from
the contractor or subcontractors and go to the design team, and from there
to the owner. It’s normal to get variation requests after change orders as
contractors’ reactions to modifications in the design or project.
Change orders can emerge because of design reviews and other
project processes involving the owner and/or the design and construction
teams. Changes can likewise arise out of the request for information (RFI)
procedure, because of missing data, failure to work as specified, or pro-
curement issues in sourcing a required item.
Ordinarily, the lead consultant is in charge of notifying the contrac-
tor of the required changes. The lead consultant might be an architect,
an engineer, or a project or construction manager. Change requests are

named accordingly: architect’s instruction (AI), engineer’s instruction
(EI),
project manager’s instruction (PMI), or construction manager’s
instruction (CMI).
4.10.1 CHANGE ORDER AND VARIATION WORKFLOWS
In the wake of accepting a direction in regard to a change, the lead consul-

tant works with the other primary departments such as structural or civil,
mechanical, electrical, and plumbing, in addition to the quantity surveyor
or cost control consultant. Together, this team reviews the potential effect
of the request on the project’s technical feasibility, budget, and schedule.
The lead consultant then summarizes the results and recommendations for
the owner.
After the owner approves the estimated project change, the design
team revises the project documentation as required, and then packages
and issues it to the contractor as an instruction. The contractor reviews the
instruction and responds within a contractually specified period of time,
including implications for feasibility, budget, and timelines.
Documents relevant to these instructions are either appended directly
or issued independently under a transmittal that is cross-referenced to the
instruction. For instance, “With reference to Engineer’s Transmittal No.
1234, we hereby instruct the following changes to your scope of work.”
The instruction to the contractor may assure that the changes will not
have any effect on project timing or cost. In case of a variation, the con-
tractor can react with a variation request or notice of a time extension or
claim. Contingent upon the contract, the contractor may document a claim
for extension of time and/or additional cost.
4.11 ANTI-DISPUTE ARRANGEMENTS
The following are practical guidelines for managing changes and varia-
tions in construction projects:
• Within the communitarian culture of the project, any party that rec-
ognizes a change in the agreed scope of works shall report that
change and provide illustrations to support it.
• The change order must be submitted to the concerned consul-
tant, contractor, or subcontractor for project effect appraisal and
approval before it goes to the owner.
• Project documents that have already been registered and issued to

the team shouldn’t be updated and circulated until the change order
has been approved by the owner. Erroneous document revisions
and distributions could compound project risk, leading to schedule
delays and cost overruns.
• All registered documents should reflect approved changes result-
ing from change orders. Details of the approved changes—such as
date, request number, and description—should be recorded within
the relevant documents, and the updated documents should be
transmitted to the concerned project team members.
CHAPTER 5
Cost and Risk Management
5.1 INTRODUCTION
This chapter addresses the basic concepts and definitions of the cost
management process including cost estimates, project finance, and cost
control, in addition to the risk management process.
5.1.1 THE CONSTRUCTION PROJECT
A project is characterized, whether it is in construction or not, by the

following attributes:
• A distinct goal or objective

• Specific tasks to be performed
• A clear beginning and end
• Resources being utilized
The goal of a construction project is to construct a specific structure.

What distinguishes the construction industry from other industries is that
its projects are large, built on-site, and usually distinctive. Time, budget,
labor, equipment, and materials are all examples of the types of resources
that are utilized on a construction project.
Cost is a main factor in most decisions with regard to construction,
and cost estimates are prepared throughout the planning, design, and
construction stages of a construction project. Different types of cost esti-
mates ranging from preliminary to detailed are conducted for different
objectives. All of these estimates are significant because they invariably
affect the disbursement of major sums. However, estimates made in the
early stages of a project are especially important because they influence
the most preliminary decisions about a project. In most cases, the final
cost (or cost estimates during construction) is appreciably higher than the
cost estimates prepared and presented during initial planning, preliminary
design, final design, or even at the beginning of construction.
Cost projections should be conducted as if owners/developers are
practical and well-qualified contractors estimating the project. Thus, all
costs that a practical, qualified contractor expects to incur should be incor-
porated in the cost estimate. This philosophy holds good for the whole
project cycle from concept development until completion of project. Each
estimate should be established as precisely as possible, in as much detail
as can be expected, and according to the most authentic information avail-
able. This objective is to be sustained so that at all stages of the project in
terms of initiation, design, and during construction, the cost estimate will,
in all respects, demonstrate a fair and realistic cost to owners/developers
or contractors.
Preparation and revision of construction cost estimates throughout
and until contract completion is the obligation of the cost engineering
office or as designated by the design agency involved. In the context of
this accountability, the cost engineer must be responsible for the com-
pleteness, quality, correctness, and the reasonableness of the cost estimate.
When it is essential to contract for consultancy services for the preparation
of bill of quantities and/or cost estimates, such services will be performed
by competent organizations skilled in cost engineering.
Other specific needs, submittals, and so on, should also be provided
to insure a complete understanding of the cost engineering requirements.
These supplementary requirements should be incorporated as part of a
complete contract scope of work. Cost estimators should ensure that each
final estimate submitted be attached by a letter of transmittal that includes
the following statement: “To the best of our knowledge the confidential
nature of this estimate has been preserved.”
5.2 COST MANAGEMENT
5.2.1 COST ESTIMATION
Estimation is not a specific science; knowledge of construction, common

sense, and judgment are necessary. Estimating of material costs can be
done with quite a high degree of accuracy. However, accurate estimation
of labor and equipment costs is significantly more difficult to accomplish.
Estimating material costs is a comparatively simple and easy task. The
quantity of materials for a specific job can be accurately assessed from
the dimensions of the drawings for that particular job. After assessing the
Cost and Risk Management • 89
quantity of material and understanding the rate per unit, the cost could
accordingly be estimated by multiplying the quantity by the unit cost.
Estimating labor and equipment costs is more difficult than estimating
material costs. The cost of labor and equipment relies on productivity and
production rate, which can vary considerably from one job to another.
The skill of the labor, job conditions, and many other factors influence the
productivity of labor.
Estimating plays a significant role in predicting future events in con-
struction process. It consists of two distinct tasks, assessing the potential
cost and determining the approximate time to construct a project.
Cost estimate has been defined in different ways. For example, esti-
mating is the accumulation of all the costs of the components of a project
or effort incorporated within its scope. To a contractor, this is the cost that
will most probably be required to complete a project in compliance with
the contract documents and to hand over to the owner. Defined differently,
it is the development of a statement of the approximate quantity of mate-
rials, time, and cost to perform construction tasks. Also, cost estimation is
defined as the process of evaluating a particular scope of work and envis-
aging the cost of implementing the work. The main challenges that a con-
struction contractor encounters are to estimate the cost of implementing
a project, schedule the detailed construction activities, and then construct
the project according to the estimated cost and schedule.
The objective of cost estimate is to prepare an accurate, cost-effective
projection of what a project will most likely cost, and it needs to be done
in different ways at different stages. Cost estimating is a complex process
comprising collection of accessible information pertinent to the scope of a
project, projected resource utilization, and anticipated changes in resource
costs. At the early stage of a project, the estimates cannot be expected
to have a high level of accuracy since little information is available. As
the design progresses, more information is received and accuracy should
improve (Figure 5.1). Required information comprises, but is not limited
to, detailed plans, specifications, existing site data, obtainable resource
• Concept
More information and
1
higher accuracy
• Design
2
• Construction
3
• Operation
4
Figure 5.1. Cost estimate stages.

data (labor, material, and equipment), contract documents, resource cost

information, relevant government regulations, and specifications of the
owner as applicable. Various terms have been used to describe estimates
by several organizations. However, there is no industry standard that has
been developed for defining estimates.
5.2.1.1 An Estimator
The estimator, quantity surveyor, or cost engineer is the person who pre-
pares estimates in the planning, design, and, perhaps, construction stages.
An estimator is engaged for studies demanding thorough understanding of
the principles and methods of engineering economics. She or he must fre-
quently work closely with managers, accountants, financial analysts, and
engineers to forecast the budget or financing requirements for the project.
As critical decisions are taken based on information contained in the con-
ceptual or preliminary estimate, this adds to accountability and obligation
for the estimator. He or she may risk reputation when an insufficiently
accurate estimate is prepared for a contract, but the owner or the contrac-
tor risks money.
A qualified estimator must understand and conceptualize the entire
project before it is fully designed. He or she must be able to understand
and visualize the details of the project. The estimator must also have the
capability to anticipate design decisions and communicate those projec-
tions during the conceptual estimating process. He or she must also be
experienced in the expected life of construction materials, accounting,
taxation, law, economics, and engineering design. Qualifications for a
good estimator comprise attention to detail, technical knowledge, focused
memory, familiarity with construction process, ability to plan the work,
knowledge of comparative costs, and good judgment. An estimator must
not waste too much time and effort to investigate unnecessary details in
determining the costs of insignificant items as the estimating will consume
time and be expensive. In a bill of quantities for a construction project,
80% of the costs can be attributed to 20% of the items, and vice versa.
5.2.1.2 Purpose of Estimation
The objective of estimation is to determine the projected costs required

to complete a project in compliance with the contract plans and specifica-
tions. For any given project, the estimator can determine with reasonable
accuracy the direct costs for materials, labor, and equipment. The bid
price can then be estimated by adding the costs for overhead (indirect
costs required to build the project), contingencies (costs for any probable
unforeseen work), and profit (cost for return for implementing the work)
to the direct cost. The contractor’s bid price of a project should be suffi-
ciently high to allow him or her to complete the project with a reasonable
profit, yet low enough to compete with other contractors and be within the
owner’s budget.
There are two different tasks in estimation: assessing the potential
cost and determining the probable time to construct a project. With an
increased focus on project planning and scheduling, the estimator is often
required to provide production costs, crew sizes, equipment volume, and
the estimated time required to implement individual jobs. This infor-
mation, combined with costs, provides an integration of the estimating
and scheduling functions of construction project management. Because
construction estimates are prepared before a project is constructed, the
estimate is, at best, an approximation of the actual costs. The actual cost
of the project will not be known until the project has been completed and
all costs have been documented.
5.2.1.3 Construction Project Costs
The contractor’s bid price of any construction project is considered the

project cost to an owner. The final price of any contractor’s bid consists of
direct cost, indirect and/or (overhead), contingency, and profit. Direct cost
in addition to overhead and/or indirect costs are considered the project
cost to a contractor. Direct cost represents the major component of the
overall bid price which comprises the cost of equipment, materials, labors,
and subcontractors. Examples of indirect cost or overhead components
comprise different types of taxes, bond premiums, insurance, and any cost
of finance such as interest on loans, commitment fees, front-end-fee, and
so on. Another classification of different disbursement could be as follows:
• Time-based cost: payments that are being paid throughout the dura-
tion of an activity or a project such as equipment rental costs, labor
wages, or utilities’ bills.
• Quantity-based cost: costs that change with the quantities like
material cost.
• Fixed cost: costs that are disbursed once at a particular point of time
(e.g., the cost of purchasing a loader or any other equipment)
• Project Direct Costs

Direct costs represents the disbursements that are paid for a given
project activity. These costs are estimated based on a cost break-
down analysis to labors, materials, equipment, and subcontractors
considering a detailed examination of contract clauses, drawings,
specifications, durations and milestones, site conditions, resource
productivity data, and the construction method used for each activity.
• Indirect Costs or Overheads
These types of costs represents the costs that cannot be assigned
to a particular activity or project. It is categorized as project or site
overhead and general or main office overhead.
 Project Overhead
It can be fixed or time-related costs and represents site-related

costs comprising the cost of items that cannot be directly
attributed to a particular work activity. These include the costs
of site utilities, supervisors, accommodation of project staff,
parking facilities, offices, workshops, stores, and first aid facil-
ity. Also, they include the cost of equipment that are required to
support working crews in various activities. To have an accurate
estimate of this type of costs, a detailed examination of the con-
tract conditions and the particular elements of site-related costs
is essential. There are ready forms and checklists developed and
modified by construction companies for the determination of
such type of costs which, in general, ranges roughly between
5% and 15% of total direct cost of the project.
 General Overhead
It represents the costs used to support the general company

activities that cannot be directly assigned to a specific project.
It comprises the main office expenses and charges for managers,
directors, design engineers, schedulers, general facilities and util-
ities, and so on. Regular examinations of the company’s general
expenses provide reasonable references for estimating accurate
values for the general overhead of a particular contract which, in
general, ranges roughly between 2% and 5% of the contract direct
cost. The amount of the general overhead that should be allocated
to a particular project is estimated from the following relation:
general overhead in a year × Project direct cost

Estimated sum of direct costs of all projects during the year
Having understood the direct and indirect costs, the total cost of the
project equals the sum of direct and indirect costs.
5.2.1.4 Types of Cost Estimation
There are many types of cost estimates that can be accomplished on a proj-
ect; each type has different degrees of accuracy. The estimating process
is seen to be increasingly more expensive as more detailed and accurate
techniques are employed. Estimating can be classified into several classes
according to purposes, budget, limitation, time, and accuracy. Generally,
the nature and characteristics of estimation can be summarized as follows.
Accuracy progresses with the development of the project such that the dis-
tribution of errors narrows from feasibility to settlement; underestimates
are more likely than overestimates and the final cost of a project cannot be
known until the settlement of project accounts. For more clarification, cost
estimate is divided into seven types:
1. Preliminary or rough cost or approximate estimate is prepared to

choose the financial aspect and is supplemented by detailed report,
brief specifications, layout plan presenting the proposal in hand,
and brief indication of rates for different components.
2. Detailed estimate is prepared prior to the invitation to bid for
contractors.
3. Quantity estimate is a comprehensive estimate of quantities for all
components of work essential to complete a project.
4. Revised estimate is also a detailed estimate and is prepared afresh,
when the original approved detailed estimate exceeds the budget by
5% or more.
5. Annual repair or maintenance estimate is carried out in order to
keep the structures in appropriate condition.
6. Supplementary estimate is required when some additions are made
to the original scope of work.
7. Extension estimate is when some modifications and extensions are
required to be made to the existing structure.
Generally, cost estimates are divided into three major types:
1. Conceptual cost estimates are prepared utilizing unfinished project

documentation.
2. Semidetailed cost estimates are developed when parts of the p roject
have been completely designed.
3. Detailed cost estimates are developed based on completely devel-
oped construction drawings and specifications. The accuracy of the
estimate depends on the completeness of the contract documents
and the qualification and experience of an estimator. The typical

accuracy of the different types of cost estimates is shown in
Table 5.1.
There are many types of cost estimates and reestimates for a p roject
based on the stage of project development. Estimates are prepared
throughout the life of a project starting with the first estimate and extend-
ing through the different phases of design and construction as shown in
Figure 5.2. Initial cost estimates represent the framework to which all
future estimates are compared. Future estimates are expected to agree with
(i.e., be equal to or less than) the initial estimates. However, often, the final
project costs go beyond the initial estimates.
5.2.1.4.1 Conceptual Estimate
A conceptual estimate is also recognized as a top-down, order of mag-

nitude, feasibility, analogous, or preliminary estimate. It is the first
Table 5.1. Accurateness of different types of cost estimate

Estimate Progress of construction Projected
types documents percent error*
Schematic design
Conceptual +10%–20%
construction documents 0%–30%
Design progress
Semidetailed +5%–10%
construction documents 30%–90%
Detailed Plans and specifications 90%–100% +2%–4%
Note: *Percent error represents the projected deviation between cost estimate and actual cost.
Concept Design Bidding Construction

Stage
Preliminary Detailed
Accurateness
Preliminary Categorical Unit price

± 25% ± 15% ± 5%
Detail level Quantity survey and

Unit cost Aggregated cost
method statement
Scheme Parametric Detailed
Figure 5.2. Level of accurateness of cost estimates.

thoughtful effort made to envisage the cost of the project. A conceptual

estimate is typically prepared as part of the project feasibility investigation
at the commencement of the project. In essence, the estimate is prepared
with limited information on project scope and is typically developed with-
out detailed design and engineering data.
The conceptual estimate is also identified as an approximate estimate
and utilized to assess the estimated budget for a project. Substantial
experience and judgment are necessary to acquire a reliable approximate
estimate for the budget.
5.2.1.4.2 Semidetailed Estimate
Semidetailed cost estimates are prepared while primary design decisions

are being considered to ensure that the project can be built in its envi-
sioned scope within the owner’s budget. The design for some features
of the project may be fully completed. Detailed estimating methods can
be utilized to determine the cost of such components, and conceptual
estimating methods are utilized to estimate the cost of those components
for which design remains to be completed. This means that databases are
utilized to assess the cost of components for which the design is not com-
pleted, and project data are used to determine the cost of components for
which the design is completed. Therefore, these estimates are recognized
as semidetailed cost estimates.
5.2.1.4.3 Detailed Estimate
A detailed estimate is also recognized as a bottom-up, fair cost, or bid

estimate. Detailed estimates are developed once the design has been com-
pleted and all construction documents prepared. The estimator divides
the project into discrete components of work and estimates the quantities
of work for each component. Next, the discrete components of work are
priced to determine an estimated cost for each item of work. The estimated
costs are added up and overhead costs are allocated to cover the contrac-
tor’s cost of managing the work.
The breakdown of tender price is illustrated in Figure 5.3. The tender
price is made up of two components, the construction cost estimate and
markup (margin). The direct cost is the collective cost of labor, equipment,
material, and subcontractor’s costs. The integration of site overheads and
office overheads with the direct cost yields the construction cost estimates.
The second component of the tender price is the markup (margin), which
contains the profit margin, risk contingency, and financial fees.
Price
Margins Cost
Direct cost Indirect cost

Financial Risk (labor, material,
Profit fees contingency equipment, and (site and office
Subcontractors) overhead)
Figure 5.3. Schematic diagram of the structure of tender price.
The different estimates discussed in the preceding text are carried out
in sequence; the previous cost estimate is considered the input to the next
one. The estimates are consecutively improved by integrating new infor-
mation and thus keeping a continuously updated estimate that formulates
the budget which enhances the control process. As the project progresses,
the volume of unknowns and uncertainties declines since the degree of
detail and the project information increases. In this way, the correctness
of the estimate is enhanced as it progresses from conceptual to detailed
estimate.
A detailed estimate is prepared by determining the costs of materials,
labor, equipment, and subcontractor work. It is developed from a com-
prehensive set of contract documents before the submission of a tender. It
follows a systematic process and starts with an exhaustive review of the
complete set of contract documents, drawings, and technical specifica-
tions. A field visit should be arranged to investigate and note factors that
can impact the cost of construction such as available space for material
storing, security, control of traffic, and existing underground utilities.
The estimator prepares a material quantity takeoff of all materials
from the drawings. The quantity of material multiplied by the unit cost
of material provides the material cost. The quantity of work demanded
of equipment is divided by the equipment production rate and then multi-
plied by the unit cost of equipment to get the total cost of equipment, and
likewise, the costs of labor are calculated.
The direct cost of a project comprises material, labor, equipment, and
subcontractor costs. Upon the completion of the estimate of direct costs,
the estimator must add up the indirect costs of taxes, bonds, insurance,
and overhead required to complete the project. A risk analysis of uncer-
tainties is required to determine an appropriate contingency to be added
to the base estimate to account for the unforeseen work that arises during
construction. Upon calculation of the direct and indirect costs, analysis
of risk is performed and then potential contingency, in addition to a profit
Table 5.2. Steps for developing a detailed cost estimate

1 Revise the project scope, while assessing the location, surround-
ing traffic, underground utilities, available storage spaces, and so
on, and determine its impact on the cost
2 Perform quantity survey for all work items
3 Acquire suppliers’ bids
4 Compute material cost = unit price × quantity
5 Determine labor cost according to the estimated production rates
6 Determine equipment cost according to the estimated production
rates
7 Acquire specialty contractor’s bids
8 Compute bonds, taxes, insurance, and overhead
9 Add contingency costs for unforeseen events that might arise
10 Add profit compatible to the volume of completed work
margin, is added to the estimate to formulate the bid price. The amount
of profit can vary significantly, based on various factors such as the size
and complexity of the project, amount of work in progress by the contrac-
tor, accuracy and completeness of the bid documents, and competition for
obtaining the job. The steps for preparing a detailed estimate are presented
in Table 5.2.
5.2.1.5 Quantity Takeoff
To develop an estimate, the estimator reviews the plans and specifications

and carries out a quantity takeoff to determine the type and amount of
work required to construct a project. The quantity of material in a project
can be accurately estimated from the drawings. The estimator must appro-
priately study each sheet of the drawings, calculate the quantity of mate-
rial, and record the amount and unit of measure. The unit cost of various
materials should be acquired from material suppliers and utilized as the
basis for determining the costs of materials for a project. If the costs of the
materials exclude delivery charges, the estimator must include appropriate
costs for shipping materials to a project.
Each estimator must prepare a framework of quantity takeoff that
ensures that a quantity is neither omitted nor calculated twice. A well-
organized checklist of work will help reduce the chances of omitting an
item. The estimator must also include a suitable percentage for waste for
those items where waste is expected to occur during construction. The

material quantity takeoff is exceptionally significant for cost estimation
because it generally constitutes the quantity and unit of measure for the
costs of labor and contractor’s equipment.
5.2.1.6 Production Rates
To estimate the time required to implement a given quantity of work, it is

essential to estimate the expected rates of production of the equipment or
labor. These rates are subject to considerable variation contingent to the
complexity of the work, skill of the labor, management conditions, and
the condition of the equipment. Production rate is the number of units of
work produced by a unit of equipment or labor in a definite unit of time.
The time is typically one hour or one day. The rate could be estimated
during an interim when production is processing at the maximum possible
speed. However, delays or disruptions may obstruct the work at any time
and lessen the average production rate to less than the ideal rates. So,
the production rate is generally reduced by a factor to account for such
disruptions.
For example, a backhoe with 1 m3 bucket may be capable of han-
dling four bucketloads per minute under ideal conditions. However, on a
particular job, the average volume per bucket may be only 0.8 m3 and the
backhoe may be practically operating only 45 min/hr. For these operating
conditions, the average output can be calculated as follows:
The ideal output: 4 m3/min × 60 min/hr = 240 m3/hr

The bucket factor = 0.8
The efficiency factor = 45/60 = 0.75
The combined operating factor = 0.8 × 0.75 = 0.6
The average output = 0.6 × 240 = 144 m3/hr
The average output should be utilized in computing the time required

to complete a job.
5.2.2 PROJECT FINANCE
At the project level, a project’s cash flow is the difference between the
project’s expenses and income. At the construction company level,
the difference between the company’s entire expenditure and its entire
income throughout a period of time is called the company’s cash flow.
Cash flow = cash in − cash out = income − expenses
Estimating cash flow is essential for a construction company for the

following reasons:
• To ensure that adequate cash is accessible to cover the demands

• It shows the maximum amount of cash required for the contractor
and when it will be needed. Therefore, the contractor can make
arrangements to secure the required cash
• It gives a reliable indicator to lending organizations that loans made
can be paid back according to an agreed schedule
• It ensures that monetary resources are entirely used for the benefit
of the owners/developers
The three main components in estimation of cash flow are:
• Expenditure (cash out), which shows the sum of the payments

that the contractor will make throughout a period of time for all
resources utilized in a project such as labor, equipment, material,
and subcontractors
• Income (cash in) that displays the revenues a contractor will receive
throughout a period of time for the work performed
• Timing of payments: In cash flow analysis, owners/contractors are
significantly concerned about the timing of payments associated
with the work performed by a contractor
When analyzing cash flow, it is very important to know the actual

dates when the expenditure (cost) will take place. At that time, expendi-
ture will be renamed as expenses. Figure 5.4 demonstrates the difference
between costs and expenses. As indicated in the figure, they are the same
with the exception that expenses are shifted (delayed) unlike costs.
5.2.2.1 The S Curve
The curve that displays the accumulative expenditure of a project’s direct

and indirect costs over time is called the S curve as it looks like the letter
S as shown in Figure 5.4. In many contracts, the owner requires the con-
tractor to submit an S curve of his estimated progress and costs during the
period of a project. This S shape of the curve can be attributed to the fact
that early in a project, activities are mainly mobilization related and the
expenditure curve is comparatively flat. As many other activities get off
700
600
500
400
300 Cost
$ × 100
200 Expenses
100
0
0 1 2 3 4 5 6 7 8
Time
Figure 5.4. Project cost and expense curves.
100
90
80
70
60
Cost
50
40
30
20
10
0
0 10 20 30 40
Time
Figure 5.5. A sample S curve.
the ground, the degree of expenditure escalates and the curve has a steeper
middle segment. Toward the completion of a project, activities are wind-
ing down and expenditure flattens again (Figure 5.5). The S curve is one
of the universal practices to control project costs.
An S curve for a project can be created utilizing the following steps:
• Developing a simple bar chart for all the activities of a project

• Allocating costs to each activity using activity duration
• Plotting the accumulative amounts of expenditure versus time by
efficiently linking the projected amounts of expenditure over the
project duration
5.2.2.2 Project Income (Cash in)
The flow of money transferred from the owner to the contractor is in the
form of progress payments. Estimates of work completed are prepared by
contractors periodically (usually monthly) and are approved by the own-
er’s representative. Based on the type of contract (lump sum, unit price,
etc.), these estimates are made on assessments of the percentage of total
contract completion or actual site measurements of quantities performed.
Owners typically retain around 10% of all approved progress payment as
a guarantee for the quality of work.
The accumulated retainage payments are typically paid to the
contractor with the final payment. In contrast to the expenses previously
displayed with a smooth curve, revenue will be a stepped curve. Also,
when the contractor gets her/his money, it is called project income (cash
in) as shown in Figure 5.6.
The time period displayed in Figure 5.7 illustrates the time intervals
at which changes in income take place. When computing contract income,
it is essential to pay attention to the retention and/or the advance payment
given to the contractor, if any.
• Retention
Retention is the amount of money retained by the owner from
every invoice, before a payment is made to the contractor. This is
to ensure that the contractor will resume the work and that no issues
160
140
Accumulative cost (× $10,000)
120
100
80
60
40
20
0
0 5 10 15 20 25 30 35
Time (months)
Figure 5.6. Example of the S curve of cash in for a project.

1,600
1,400
1,200
1,000
$ × 10,000
800
Revenue
600 Income
400
200
0
0 2 4 6 8 10 12
Duration (months)
Figure 5.7. Project revenue and income curves.
will emerge after completion. This retainage amount ranges from

5% to 10% and is reserved by the owner from every invoice till the
end of the contract where the contractor is paid the entire retained
amount of money.
• Advanced payment
This is an amount of money paid to the contractor for mobiliza-
tion arrangements. Then, it is subtracted from contract progress
payment or invoices. Employing this strategy regulates the contrac-
tor cash flow and prevents him/her from price front loading at the
commencement of a contract implementation. This strategy, how-
ever, may be utilized only in projects that necessitate expensive site
preparation, temporary facilities on-site, and storage of expensive
materials at the beginning of a project implementation.
5.2.2.3 Calculating Contract Cash Flow
Having estimated the contract expenses and income as discussed in the

preceding section, Project Income (Cash in), it is possible to compute the
contract cash flow. If the contract expense and income curves were plotted
side by side, then the net cash flow is the difference between the points of
both curves. Figure 5.8 illustrates the cash flow of a particular contract.
The crosshatched area displays the difference between the contractor’s
expense and income curves, that is, the amount that the contractor will
require to finance project implementation. The bigger this area, the more
money required to be financed and the more the interest charges antici-
pated to cost the contractor.
The contractor may demand an advanced payment from the owner.
This adjusts the position of the income profile so that no overdraft takes
place or is largely reduced, as illustrated in Figure 5.9.
In case fewer payments (two or three payments) over the contract
period are carried out, this will lead to extensively increase the overdraft
1,800
1,600
1,400
Accumulative cost ($ × 100)
1,200
ft
1,000 dra
v er
800 O Expenses
Income
600
400
200
0
0 2 4 6 8 10 12
Duration
Figure 5.8. Cash flow according to monthly payments.
2,000
1,800
1,600
Cumulative cost ($)
1,400
1,200
1,000
Expenses
800
600 Income
400
Down 200 0
payment 0
0 1 2 3 4 5 6 7 8 9 10 11 12
Duration
Figure 5.9. Effect of advance payment on improving cash flow.

1,800
1,600
1,400
Accumlative cost ($)
1,200
1,000
800 Expenses
600 Income
400
200
0
0 2 4 6 8 10 12
Duration
Figure 5.10. Effect of receiving two payments on cash flow.
as presented in Figure 5.10. From the previous illustrations, the following

factors that influence the project finance (cash flow) should be analyzed
and considered when computing the cash flow:
• The project bar chart and project schedule

• Activities’ direct and indirect cost
• Contractor’s strategy of paying her/his expenses
• Contractor’s markup, mainly the profit margin and contingency
• Retention amount and its reimbursement time
• Period of delay in payment by owner
• Advanced or mobilization payment
• The cash flow computations are performed as presented in the

following steps:
 Prepare project schedule and estimate project and activity
duration.
 Plot bar chart depending on early or delayed dates.
 Compute the cost per time interval.
 Compute the accumulative cost.
 Adjust the cost according the schedule of payment to identify
the expenses.
 Calculate the accumulative revenue (revenue = cost × (1 + markup)).
 Adjust the revenue according to the retention and delay of
payment by owner to estimate the income.

 Compute the cash flow (cash flow = income – expense) at the

contract’s different time periods.
5.2.2.4 Minimizing Contractor Negative Cash Flow
It is very crucial for the contractor to minimize the negative cash flow
because this may cause delay to her/him while implementing the contract
due to lack of monetary resources. These are some of the procedures the
contractor may employ to minimize negative cash flow:
• Front loading of rates, in which the contractor increases the prices

of the earlier components in the bill of quantities. This ensures more
income at the early stages of the project. However, this practice
might create a risk to a contractor or an owner
• Alteration of work schedule to delayed start dates in order to delay
payments. In such a case, the contractor should be conscious that
the delay might affect the project completion date and may expose
her/him to liquidated damages
• Reduced delays in getting payments
• Asking for down or mobilization payment
• Accomplishment of maximum production rates on the site to
enhance the monthly payments
• Increasing the markup and decreasing the retention
• Regulate the timing of delivery of large material orders to be in line
with the submittal of the monthly invoice
• Delay in paying labor wages, equipment rentals, material suppli-
ers, and subcontractors, after considering the potential risks of this
practice
5.2.3 PROJECT CONTROL
The objective of project control deserves attention. Project control pro-

cedures are principally intended to recognize deviations from the project
plan rather than to propose potential areas for cost saving. This character-
istic reflects the advanced phase at which project control becomes signifi-
cant. The time at which major cost savings can be accomplished is during
the planning and design stages of a project. During the actual implemen-
tation, changes are likely to delay the project and result in excessive cost
escalations. Consequently, the focus of project control is on conforming to
the original design plans or specifying deviations from these plans rather
than on looking for significant enhancements and cost savings. It is only

when a rescue operation is needed that major changes will generally take
place in the construction plan.
5.2.3.1 Problems That May Arise During Construction
In construction, almost no project is implemented as planned. Control

requires to be employed due to the dynamic nature of the construction
process. Control after project completion is useless and updates are typi-
cally done periodically. Control can be exercised for project schedule and/
or project cost. As the construction stage of project begins, the project
generally will encounter delays and/or cost overruns. The following is a
list of the features that might cause such issues:
• Variation in activity durations and quantities

• Unexpected variations in the availability of resources
• Change orders by owners or their representatives
• Accidents
• Procurement delays
5.2.3.2 Schedule Updating
Construction usually includes a deadline for project/milestone completion;

therefore, contractual agreements will concentrate attention on schedules.
More generally, delays in construction lead to additional costs due to late
facility possession or other factors. Just as costs paid/incurred are com-
pared to budgeted costs, actual activity durations may be compared to
expected durations. In this process, projecting the time to complete spe-
cific activities would be necessary.
It is imperative to formulate efficient and cost-effective methods for
collecting information on actual project achievements. Usually, investi-
gations of work completed are carried out by inspectors and project man-
agers and then actual work completed is determined. Once actual work
completed and time expended on specific activities are noted, deviations
from the baseline schedule estimate can be determined.
For example, Figure 5.11 represents the originally scheduled project
progress versus the actual progress on a project. This figure is determined
by adding up the percentage of each activity that is complete at different
points in time; this sum can be weighted by the magnitude of effort related
to each activity. In Figure 5.11, the project was ahead of the o riginal
120%
100%
Percentage of completion Planned progress
80%
B
60% A Adjusted estimate of

future progress
40%
20%
Actual progress
0%
0% 20% 40% 60% 80% 100% 120% 140%
Percentage of estimated project duration
Figure 5.11. Planned versus actual progress over time on a project.
schedule for a period including at point A, but it later turned out to be

late at point B by an amount equal to the horizontal distance between the
estimated and the actual progress observed to date.
In assessing schedule progress, it is imperative to pay an attention
that some activities own floats, whereas delays in activities on the critical
path will result in project delays. In particular, the delay in estimated
progress at time t may be vanish by utilizing activities float causing no
overall delay in the project completion or may cause a project delay.
As a result of this ambiguity, it is desirable to update the project sched-
ule to formulate an accurate interpretation of the schedule adherence.
After employing a scheduling algorithm, a new project schedule can be
developed.
It is typical that actual durations of activities vary from those esti-
mated. Furthermore, there may be additions or deletions to the scope of
a contract that will influence the time at which activities can be started
or finished. Schedule updating is a technique for incorporating the latest
progress status into the schedule.
Data have to be compiled on the actual progress of completed activ-
ities and those under implementation. An entirely new estimate of the
amount of work remaining to be performed should be carried out for each
activity. The possible output of various resources should be measured. If
the project is identified to be behind schedule, corrective procedures must
be employed to compensate the delays. A technique for manual schedule
updating can be summarized in the following steps:
• Change the duration of all completed activities to zero.

• Classify all activities on which work is ongoing as Live Activities.
• Update early start dates of live activities and their remaining
durations as actuals.
• Change duration of future activities as documented in the update
report.
• Perform network schedule analysis in the normal way and generate
a new activity schedule.
5.2.3.3 Earned Value Management
For cost control on a project, the construction plan and the accompanying
cash flow estimates can formulate the baseline reference for consequent
project monitoring and control. The final or detailed cost estimate formu-
lates a baseline for the evaluation of financial performance throughout a
project’s time frame. To the degree that costs are within the detailed cost
estimate, the project is identified to be under financial control. Overruns
in specific cost categories indicate the likelihood of issues and indicate
precisely the problems likely to be encountered.
The key to a profitable project is to control construction costs
within the budget and to recognize when and where job costs are varied
or deviated. The budget estimates the amount of money that will be
required over the different periods of a project’s lifetime. Different pro-
cedures are usually utilized for cost control such as S curve and earned
value (EV) techniques. Because it is the most widely used method, EV
technique is discussed next. EV technique includes a mixture of four
measures that are required for the analysis. These measures comprise
the following:
• Budgeted cost of work scheduled

Budgeted cost of work scheduled (BCWS; planned value [PV])
measures what is planned in terms of budget cost of the work that
should take place according to the baseline schedule of the project.
BCWS curve can be represented by accumulating the budget cost
of the baseline schedule.
• Budgeted cost of work performed
Budgeted cost of work performed (BCWP; EV) measures in terms
of the budget cost of work what has actually been completed to
date. BCWP curve can be represented stage by stage after each
reporting period. Here the budget cost of the work performed on

the schedule is accumulated, which represents the actual percent
completed.
• Actual cost of work performed
Actual cost of work performed (ACWP) measures what has been
paid in terms of the actual cost of work, which has actually been
completed to date. BCWS curve can also be represented stage by
stage after each reporting period. Here the actual expenditures on
the schedule are accumulated, which represents the actual percent
complete.
• Budget at completion
Budget at completion (BAC; total planned value) measures the
total estimated budget of the entire project.
The importance of these four measures is that they directly iden-
tify schedule and cost performances of the project at various report-
ing periods. This is illustrated in Figure 5.12.
Using these four measures, various project performance indicators

and forecasts can be computed. The following table (Table 5.3) and indi-
cators represent how such information could be beneficial.
EAC
cost variance
140 projection at
completion
Target BCWS
120 BAC
schedule
Schedule ETC
100 FCST
delay
Cost Current projection at
variance schedule completion
80 Schedule to date
variance
Cost
to date
60 ACWP Actual cost of work performed
BCWP Budgeted cost of work performed
BCWS Budgeted cost of work scheduled

40
BAC Budget at completion
EAC Estimation at completion
Data
20 ACWP date ETC Estimate to complete
BCWP FCST Forecast of remaining work
0
0 2 4 6 8 10
Duration
Figure 5.12. Earned value measures and indicators.

Table 5.3. EV information

Project management queries EVM performance indications
Schedule evaluation and
How is time efficiently handled?
projection
Is a project behind or ahead of
Schedule variance (SV) = EV−PV
schedule?
Schedule performance index (SPI)
How is time efficiently spent?
= EV/PV
When is a project likely com- Time estimated at completion
pleted? (EACt)
How is cost efficiently handled? Cost evaluation and projection
Is a project over or under budget? Cost variance (CV) = EV−AC
How efficiently are resources Cost performance index (CPI) =
utilized? EV/AC
How must remaining resources be To-complete index (TCPI) =
efficiently utilized? (BAC−EV)/(BAC−AV)
What is a project likely to cost at Estimate at completion (EAC) =
completion? BAC/CPI
Will a project be above or below Variance at completion (VAC) =
estimated budget? BAC−EAC
What is the expected cost for the
Estimate to complete (ETC)
remaining work?
Note: BAC = budget at completion; EV = earned value; PV = planned value; AC = actual cost
Indicators
• Schedule analysis and forecasting (How are we doing timewise?)
 Schedule variance (Are we ahead or behind schedule?)
It is the difference between the earned value (BCWP) and the

planned budget cost (BCWS).
SV = EV−PV = 32−48 = −16; SV > 0 indicates ahead of schedule.
SV could be represented as a percentage;
SC% = SV/PV = −16/48 = −33%; means that 33% of the planned
work has not been achieved (negative value).
 Schedule performance index (How efficiently are we using
our time?)
SPI = EV/PV = 32/48 = 0.67; means that the current efficiency or
performance represents 67% of the planned performance.
 Time estimate at completion (When are we likely to finish?)
EACt = (BAC/SPI)/(BAC/month) = (150/0.667)/(150/12) =18

months; means that if we continue work with this performance,
the project will be complete in 18 months.
• Cost analysis and forecasting (How are we doing costwise?)
 Cost variance (Are we under or over budget?)
CV = EV−AC = 32−40 = −8; CV < 0 indicates over budget.

CV could be represented as a percentage;
CV% = CN/EV = −8/32 = −25%; means that the cost of the work
performed so is greater than the planned cost, at 25%.
 Cost performance index (How efficiently are we using our
resources?)
CPI = EV/AC = 32/40 = 0.80; means that 1 pound efficiency =
0.8 pound.
 To-complete performance index (How efficiently must we use
our remaining resources?)
TCPI = (BAC−EV)/(BAC−AC) = (150−0.8)/ −(150–40) = 1.07;
means that the performance should be improved from 0.8 to 1.07.
 Estimate at completion (What is the project likely to cost?)
EAC = BAC/CPI = 150/0.80 = 187.50; means that if the project

continued with that performance, it would cost 187.50 instead
of 150.
 Variance at completion (Will we be under or over budget?)
VAC = BAC−EAC = 150−180.50 = −37.50; means that if the

performance continued at the current pace, the cost of the project
will be increased by 37.5. And this value could be represented as
a percentage VAC% = VAC/BAC = −37.50/150 = −25%
 Estimate to complete (What will the remaining work cost?)
ETC = (BAC−EV)/CPI = (150−32)/0.80 = 147.50

To check the calculations, we calculate the EAC based on ETC
EAC = AC + ETC = 40 + 147.50 = 187.50 OK
5.3 RISK MANAGEMENT
5.3.1 RISK MANAGEMENT INTRODUCTION
Risk analysis is a process that accounts for all potential hazards that might
affect a project as well as all the opportunities that might be beneficial
for a project. Thus, it means that there are positive risks that should be
increased and negative ones that should be decreased, which is the main
Risk analysis
process
Risk Risk Risk

Risk Qualitative Quantitative
management response monitoring
identification analysis analysis
planning planning and control
Figure 5.13. Risk analysis in construction projects.
objective of risk analysis. The outcomes of this process are different con-
tingencies dependent on the level of probability or confidence. However,
it is not possible to measure or estimate directly the contingencies due to
uncertainties in a project. To achieve those outcomes, the following brief
processes should be performed as represented in Figure 5.13.
1. Risk management planning: Deciding how to plan, assigning a

risk specialty team, and executing the risk management process for
a specific project
2. Risk identification: Determining which risks might affect a project
and identifying and documenting their characteristics
3. Qualitative risk analysis: Assessment of the probability of
occurrence and the impact of all risks, then prioritization for further
analysis
4. Quantitative risk analysis: Numerical assessment of the impact of
all risks on the overall project
5. Risk response planning: Developing actions to be used for
increasing opportunities and decreasing threats that might affect
the project
6. Risk monitoring and control: Keeping a watch on identified risks,
identifying new risks, and applying a risk response plan and evalu-
ating its effectiveness throughout the project life cycle
All these processes occur at least once during the project duration,
and they could overlap with each other. The following section highlights
and focuses on the risk processes mainly related to the practically com-
putational analysis of risk. These processes, namely, risk identification,
qualitative risk analysis, and quantitative risk analysis are discussed in
detail as follows.
5.3.1.1 Risk Identification
Until recently, there was a lack of an accepted method of identifying risk

among professionals in the construction industry. Moreover, the con-
struction industry does not seem to recognize, or accept, that risk should
be addressed formally and given serious attention in order to minimize
undesirable consequences during construction. Identifying risks helps in
determining the suitable methods of evaluating, quantifying, and manag-
ing the risks that might affect a project.
Risk identification is defined as a technique that aims to identify an
approximate estimate(s) of a risk that might occur during the execution of
a certain activity and its impact on this activity and the entire project. The
purpose of risk identification is to give reliable results for project manag-
ers with which they could decide and determine whether there will be an
overrun in the project’s schedule and costs or not.
5.3.1.1.1 The Process of Risk Identification
The risk identification process has been broken down into the following
six steps:
1. Knowledge acquisition
The first step involves knowledge acquisition. That is, first and
foremost, the function of which is a better understanding of what
the project objectives are including commonly time, cost, and
quality. To understand the threats to these objectives (or project
parameters), it is fundamental for contractors to examine the stra-
tegic brief, feasibility study, cost plan, master program, and project
execution plan.
2. Selection of the representative core team
The second step is the selection of the core design team, which
will participate in the identification process of risk facing the
project. These are the essential personnel upon whom the prog-
ress of the design would ultimately depend and who are fully
committed throughout the project life cycle. These personnel
would include the senior representatives of each design disci-
pline. It is essential for contractors that all the design disciplines
are represented; otherwise, there is a potential for critical risk
areas to be overlooked.
3. Presentation of the process to the core team

This step encourages the airing of any doubts or skepticism among
the core team that can be laid to rest and foster participation in and
adoption of the process. This step aims to clarify the objectives of
the risk identification process, potential risks, potential opportuni-
ties, and the expected time frame for the project with risks taken
into consideration.
4. Identification
This step involves identifying, as exhaustively as possible, the risks
associated with each activity and documenting what is involved,
such as definitions of the measures of impact and the probabilities of
risk occurrences. The data is obtained by using several techniques,
such as brainstorming, nominal group, and Delphi techniques.
5. Estimation
The aim of this step is to draw from interviewees or workshop
attendees the identification and assessment of impact and probabil-
ity for each of the risks identified, using information gathered from
the previous steps. Depending on the stage of the project, different
assessment criteria may be appropriate.
6. Initial response
The aim is to gain consensus among the design team members/
interviewees to establish if there is a general agreement with regard
to the risks identified and the measures assigned to them. This ver-
ification can be conducted using three different techniques identi-
fied as follows: (1) cross-checking for consistency between values,
(2) verification using different elicitation techniques, (3) and verifi-
cation by using final result.
Risk identification is considered the most important stage in the
project risk analysis and management. Risk identification assesses
the likelihood and magnitude of potential costs, schedules, and
quality overruns for a given project. Constructing a common meth-
odology to manage and overcome potential risks helps in optimiz-
ing project resources and schedules.
5.3.1.2 Qualitative Risk Analysis
The concept of qualitative risk analysis is of essential importance when

a project management team and/or a project management team leader
wants to take action at the commencement or during the bidding stage of
a project to adequately and appropriately ascertain the approximate level
of risks that may exist during the implementation of the given project. To
be more specific, the concept of the qualitative risk analysis refers to the
project-related process of performing a systematic and complete analysis

of the probabilities and impacts of all potential risks that were identified
by the project management team and/or project management team leader.
The qualitative risk analysis can be performed at any time during a project
life cycle. However, it must be conducted at least once at the commence-
ment of any project. The primary goal is to determine the probability of
the occurrence of risks and their level of impact in case they occurred.
The main concept behind both qualitative and quantitative risk anal-
yses is the same. It is that every event that represents a risk to a certain
project has a probability of occurrence and a level of impact if it occurs.
The only difference between quantitative and qualitative analysis is the
way that the values of the probability and the impact are represented for
these two components. In quantitative analysis, numeric values are uti-
lized, but in qualitative analysis, words or descriptors are used.
5.3.1.3 Quantitative Risk Analysis
Quantitative risk analysis is a process that is conducted on risks that have

been prioritized during the qualitative risk analysis stage. In qualitative
analysis, the risk events are analyzed and assigned numeric ratings to
determine the potential contingencies that might affect a project. There
are several techniques used in quantitative analysis, such as
(a) Modeling and simulation: These techniques use a model that con-
verts the uncertainties specified at a detailed level of the project into
their potential impact on a project. The Monte Carlo technique is
one of the most commonly used simulations introduced by Enrico
Fermi in 1930. In a simulation, the project model is computed many
times (iterated) with the input values randomized from a probability
distribution function chosen for each iteration. Then a probability
distribution (i.e., total cost or completion date) is calculated.
(b) Sensitivity analysis: It helps in determining which risks have the
most potential impact on the project. Sensitivity analysis methods
have been applied in various fields including complex engineer-
ing systems, economics, physics, social sciences, medical decision
making, and others.
(c) Expected monetary value: This is a statistical concept that calcu-
lates the average outcome when the future includes scenarios that
may or may not happen.
(d) Decision trees (DT): This is used when decisions are sequential,
that is, one decision leads to another, and so on.
(e) Artificial intelligence: It has also widely been used in perform-

ing risk analysis and contingency estimation. For example, a fuzzy
system model has been employed to estimate the likelihood of
occurrence of a change event and to predict the effect of change
on project parameters using data available at the early stages of
projects.
5.3.2 RISK ANALYSIS ILLUSTRATIONS
This section provides illustrations utilizing hypothetical data for perform-

ing the main processes of risk management. It is assumed here that the
final short list of the major risks that might affect a project in terms of
their probabilities and impacts to perform quantitative analysis are iden-
tified. This short list can be obtained from the risk management team of
a company after conducting the complete processes of risk management
planning and risk identification.
The short list contains the number of experts who decide on each
level of the probability of occurrence and the impact of each risk factor at
each work division or component of a project. This short list is obtained
from questionnaires that are filled out by the experts who are involved in
projects similar to the project being analyzed.
In each questionnaire, each expert estimates the level of probability of
the occurrence of each risk factor and the level of its impact on the differ-
ent work divisions of a project. Later, all the data obtained are collected in
one short list as shown in Figure 5.14. In this figure, for example, for the
Figure 5.14. Risk factors’ short list.

Note. H = high; HVAC = heating, ventilation, and air conditioning; L = low; M = medium;
VH = very high; VL = very low.
site works division, the number of experts who expected the probability
of the dollar exchange rate risk factor happening at medium, low, and
very low levels are 1, 1, and 3, respectively. Also, the number of experts
who decided the impact, increase in cost, of the dollar exchange rate risk
factor on the site works division to be low and very low levels are 2 and
3, respectively.
By getting the short list of risk factors, a severity matrix is developed
to assign the additional cost required if a certain risk occurred for each
activity, as shown in Figure 5.15.
The limits of severity are estimated according to the probability
impact matrix weights, which could be developed by the risk management
team with the consultation of other experts as shown in Figure 5.16. The
percentage increase of total cost is estimated by asking experts involved in
construction projects similar to the project under consideration.
Later, Crystal Ball software could be employed as an add-on soft-
ware to the excel sheet model for performing the Monte Carlo simula-
tion process. The probability of occurrence and the impact of a certain
risk factor on a certain activity are defined in Crystal Ball software as
V. low Low Moderate High V. high
Severity S≤ S> S≤ S> S≤ S> S≤ S>
0.010 0.010 0.090 0.090 0.250 0.250 0.490 0.490

%
increase 6%
0% 2% 3.00% 4.40%
of total
cost
Figure 5.15. Severity matrix.
Probability V. low Low Moderate High V. high
Impact 0.1 0.3 0.5 0.7 0.9
0.1 0.010 0.030 0.050 0.070 0.090
0.3 0.030 0.090 0.150 0.210 0.270
0.5 0.050 0.150 0.250 0.350 0.450
0.7 0.070 0.210 0.350 0.490 0.630
0.9 0.090 0.270 0.450 0.630 0.810
Figure 5.16. Probability impact matrix.

Figure 5.17. The risk analysis simulation process using Crystal Ball software.
a ssumptions using the corresponding distribution in accordance with all

experts and their expected weights that are previously defined.
The severity is then calculated through multiplying the expected prob-
abilities and the impacts of each risk factor. Accordingly, the additional
percentage of the total cost of each division affected by a certain risk is
calculated based on the developed severity matrix. After identifying the
previous inputs, the total additional cost percentage for the whole project
is selected to be forecast through the Monte Carlo simulation process. This
process randomly generates values for uncertain variables repeatedly to
simulate the defined data as shown in Figure 5.17.
During the simulation process, all the expected probabilities, impacts,
and, accordingly, additional cost percentages are iteratively changed till
the stopping criteria is met. The outcomes of risk analysis process are dif-
ferent contingencies against the probabilities, percentiles, that the project
total cost will not exceed the estimated one at each contingency as shown
in Figure 5.17. By estimating the appropriately required profit from each
analyst’s perspective, the different markups against different probabilities
can be determined by adding this estimated profit to each contingency.
CHAPTER 6
Quality and Safety

Management
6.1 INTRODUCTION
This chapter addresses to a large extent the definitions and procedures

of the functions and importance of construction quality and safety
management.
6.2 QUALITY MANAGEMENT FOR

CONSTRUCTION PROJECTS
After completing this section, you will be able to
• Identify the function and importance of construction quality

assurance.
• Recognize the function and importance of contractor quality control
(CQC).
• Identify the purpose of control of on-site construction through the
three-phase control system.
• List the responsibilities of quality control (QC) personnel regarding
the three-phase control system.
• Explain the purpose and importance of the CQC report.
• List the components of the CQC report.
• Explain the purpose and importance of the government quality
assurance (QA) report.
• Discuss the review and use of quality management reports.
• Discuss the objectives of contractor and government testing.
• Describe contractor testing procedures.
• List testing requirements.

• Describe project completion procedures.
Note: The term “government” in this section represents owners/develop-

ers of construction projects or their representatives/consultants.
6.2.1 DEFINITIONS
(a) Quality assurance: The essential function of QA is to achieve

completed construction that meets all contract prerequisites. Assur-
ance is characterized as a level of certainty. QA personnel consis-
tently guarantee that the contractor’s work complies with contract
requirements.
(b) QA personnel: The role of QA team is to ensure that the CQC sys-
tem is functioning properly. To do this, QA personnel
• Examine the QC methods being applied to determine if the con-
tractor is appropriately controlling design activities in design-
build contracts.
• Examine the QC methods being applied to determine if the con-
tractor is appropriately controlling construction activities.
• Assure that the essential changes are made in the contractor’s
QC system, if there are too many construction deficiencies.
• Assist the contractor in understanding and executing the con-
tract requirements.
• Examine current and completed work.
• Audit QC documentation to ensure adequacy.
(c) Contractor quality control: The principal function of CQC is
the successful implementation of a realistic plan to assure that the
obligatory standards of quality construction will be met. In CQC,
the contractor outlines procedures to manage and control his own
and those of designer of record, consultant, architect-engineer,
subcontractor, and supplier so that the completed project fulfills
contract requirements. For design-build contracts, this comprises
providing and maintaining a design QC plan as a part of the over-
all contract QC plan. This plan, as a minimum, must assure that
all documents are reviewed by a technically proficient, indepen-
dent reviewer specifically named in the plan. This review cannot be
completed by the same designers who developed the product. The
design QC plan could be managed by a design QC manager who
has proven engineering or architectural design experience or is a
registered engineer or architect. The design QC manager is under
the supervision of the QC manager.
Quality and Safety Management • 121
(d) QC personnel: As stated previously, CQC is a contractor responsi-

bility. This includes the following:
• Provide the quality specified in the plans and specifications and
in the request for proposal for design-build contracts as well as
the contractor’s accepted proposal
• Develop and sustain an effective CQC system
• Perform all control activities and tests
• Prepare satisfactory documentation of CQC activities
The contractor also is required to assign a capable representative

on-site to supervise the CQC system. He must have full authority to act
for the contractor on CQC problems. His responsibilities include work-
manship, methods, and techniques to ensure that all work is executed
appropriately by competent and careful workers. For design-build con-
tracts, responsibility also comprises design quality and the performance
of constructability, operability, and environmental review of the design.
6.2.2 THREE-PHASE CONTROL SYSTEM
6.2.2.1 Purpose
The primary purpose of the three-phase control system is to enable the

contractor to plan and schedule the work to ensure that he is prepared
to start each new definable feature of work. The three phases of control
(preparatory, initial, and follow-up) are the core of the construction quality
management system. When they are carried out as outlined in the specifi-
cations, success in completing the work to comply with necessities of the
contract is improved.
6.2.2.2 Three-Phase Control Responsibility
Develop, schedule, and implement procedures for tracking phase control

meetings for definable features of work in the QC plan.
• Notify appropriate personnel of time, date, and agenda.

• Conduct meetings (preparatory and initial).
• Follow safety considerations and conduct activity hazard analyses
(AHAs).
• Document actual discussions and provide minutes to attendees.
• Monitor work in place through follow-up phase.
• Conduct additional control phase meetings, as needed.
6.2.2.3 The Three-Phase Control System Process
1. Preliminary phase: This phase shall be completed prior to begin-

ning work on each definable feature of work. Perform this work as
detailed:
• A review of each paragraph of applicable specifications and
references
• A review of contract plans
• A check to assure that all materials and/or equipment have been
tested, submitted, and approved
• A check to ensure that provisions have been introduced to
provide required control inspection and testing
• Inspection of the work area to assure that all required prelimi-
nary work has been completed
• A physical examination of required materials, equipment, and
sample work to assure that they are on hand and conform to
approved shop drawings or submitted data
• A review of the appropriate activity risk analysis and discussion
of procedures for constructing the work comprising the review
of repetitive insufficiencies
The government shall be notified before beginning any of the
required actions of the preliminary phase as required in the QC
specifications.
This phase shall comprise a meeting conducted by the QC
manager and attended by the superintendent, other CQC p ersonnel
(as applicable), and the foremen accountable for the definable
feature. The results of the preliminary phase actions shall be doc-
umented by separate minutes prepared by the QC manager and
attached to the daily CQC report.
2. Initial Phase: This phase must be completed at the beginning of a
definable feature of work. The initial phase will validate that con-
trol for the work done in the preliminary meeting is performed and
the work is implemented to the level of skill mutually agreed upon.
This work is performed as detailed:
• Review minutes of preliminary meeting
• Check preliminary work
• Verify sufficiency of controls to ensure full contract compliance
• Establish level of workmanship
• Resolve all differences
• Check safety to comply with the safety plan and AHA. Review
AHA with workers
The government shall be notified ahead of beginning the initial

phase as required in the CQC specifications.
The QC manager is responsible for the initial phase meeting.
Separate minutes of this phase shall be arranged by the QC m anager
and attached to the daily CQC report. The initial phase shall be
repeated for each new worker on the site or any time the expected
level of workmanship is not being attained.
3. Follow-up phase: Daily checks shall be performed to ensure con-
tinuing compliance with contract requirements, including safety and
control testing, until completion of the specific feature of work. The
checks shall be made as a record in the CQC documentation. Final
follow-up checks shall be performed and all shortcomings fixed
preceding the start of additional features of work. QC p ersonnel
should repeatedly refer back to the standards set in the preliminary
and initial phases.
Cautionary note: QC personnel, during day-to-day activities, can easily

fall into the trap of only working to detect deficiencies when their target is
to prevent deficiencies.
6.2.3 DOCUMENTATION
6.2.3.1 Quality Management Record Keeping
A complete record-keeping and information exchange system is an essen-

tial quality management tool. In addition to identifying specific deficien-
cies, careful report analysis will also distinguish patterns in the team’s
performance. If these patterns are damaging, early detection and fixing will
save time, effort, and money for both the government and the contractor.
6.2.3.2 The CQC Report
• The requirement for the contractor to submit daily QC reports is

expressed in the QC specification. As mentioned previously, the
coordination meeting or the mutual understanding meeting should
include a detailed discussion of reporting procedures, required
information in the reports, and the importance of the reports. The
QC report is to be submitted at an agreed-upon time every day, and
all information relating to QC activities is to be incorporated in the
report.
 There is no form specified for the QC report. Contracts utiliz-

ing the Resident Management System (RMS)/Quality Control
System (QCS) do mandate a particular form. However, there
might be sample forms incorporated in the contract and they
are highly recommended to be used. Regardless of the form and
format utilized, it must include the information defined in the
QC specification.
 Major elements of information required in the QC report
include, but are not limited to, the following:

 Contractor/subcontractor and the level of responsibility
 Operating equipment with hours worked, idle, or down
for repair. Work accomplished each day, giving location,
description, and by whom. When a Network Analysis
System (NAS) is used, identify each phase of work com-
pleted each day by NAS activity number
 Test and/or control activities executed with results and ref-
erences to specifications/drawings requirements. The con-
trol phase should be classified (preparatory, initial, and
follow-up). List deficiencies identified along with corrective
action
 Quantity of materials received at the site with statement as
to adequacy, acceptability, storage, and reference to specifi-
cations/drawings requirements
 Submittals audited, with contract reference, by whom, and
action taken
 Off-site surveillance activities, comprising actions taken
 Job safety assessments identifying what was checked,
results, and instructions or corrective actions
 Instructions given/received and differences in plans and/or
specifications
 Attach QC specialists’ and design QC manager’s reports
 Contractor’s verification statement
 When activities are accomplished, they must be noted on the
day-to-day QC report. The government performs a final fol-

low-up inspection for accomplished activities.
 The QC manager may attach separate reports for subcontractor
work, or these reports may be incorporated into one comprehen-

sive report.
 The QC reports must include an accurate and comprehensive
picture of QC activities. QC reports should not concentrate only

on work items that have been completed but also must present
evidence of control activities. They should be precise, factual,

legible, as objective as possible, and emphasize QC actions.
 QA personnel assess QC reports as they are received. If state-
ments are identified in the report that are contrary to QA

personnel’s knowledge of the work, action will be taken to
resolve the conflicts. The contractor may be requested to submit
a complementary report containing corrections.
6.2.3.3 The Government QA Report
The QA report is the government’s record of project-related events and is

prepared for each day of visit. The QA report is not expected to duplicate
information contained in the QC report.
6.2.3.4 Deficiency Tracking System/Rework Item List
Incorporated as a part of the CQC program is an obligation for a formal

deficiency tracking system. As outlined in the accepted QC plan, it shall
contain a cumulative list of job deficiencies/rework items. This comprises
items identified by QA personnel, QC staff, testing failures, and so on.
This list shall be frequently updated with dates of corrective actions. The
system is subject to be revised by the government. If the QCS module
(contractor module—RMS) is utilized/required, there should be a defi-
ciency tracking system in it.
6.2.4 TESTING
6.2.4.1 Importance of Testing
Testing is an extremely significant part of CQM. If tests are not conducted

appropriately, there are many construction processes and materials that
cannot be acknowledged as satisfactory. Mere observation is inadequate.
6.2.4.2 Types of Tests
1. QC testing: The contractor implements control testing to estimate

whether construction processes and materials are generating the
expected contractual product.
2. QA testing: The government performs assurance testing to verify

that the contractor’s control testing is satisfactory.
6.2.4.3 Procedures
1. The contractor must study properly the projected “testing proce-

dures” as defined in in the QC plan. These projected procedures
must be discussed at the coordination meeting or the mutual under-
standing meeting. Any difference with regard to testing procedures
must be resolved prior to beginning the construction.
2. The contractor must present a list of obligatory control tests and
specify whether the tests are to be performed by an independent,
approved testing laboratory or through the utilization of his own
personnel and facilities. Approved testing laboratory means labora-
tories that have been validated by the specialized authorities.
3. Regardless of the method of testing the contractor utilizes, he or
she has to assure that specified laboratory procedures are used and
that laboratory facilities are licensed.
4. QC testing is certified in a random manner by QA testing. QA tests
are unannounced random tests that repeat QC tests. QA testing can
be implemented by any of the following
a. Government personnel using the contractor’s equipment and
facilities
b. An independent testing laboratory
c. A field office, district, or division government laboratory
5. QC personnel must be experienced regarding laboratory and test-
ing procedures. They must be able to visually identify appropriate
and improper testing procedures. All involved personnel should be
made aware of the methods to be utilized for and the extent of QC
testing.
6. Before testing begins, the subsequent questions should be answered
and verified against the approved QC plan:
a. Has all required testing been identified?
b. Are test reporting requirements understood?
c. Have laboratory facilities and testing equipment been verified as
satisfactory?
d. Are laboratory personnel qualified?
e. Has the calibration of equipment been confirmed as accurate?
f. Is there a procedure for documenting corrective actions?
7. After QC testing has commenced, a thorough examination must be
made of the test reports submitted to determine that
a. Reports are being submitted for all tests completed.
b. Reports are comprehensive and precise.

c. Failed tests are retested and cross-referenced to the original
failed test.
6.2.4.4 Test Tracking System
The contractor must develop and maintain a system to track verification,

control, and approval of tests. Each intended test type and frequency must
be entered into the tracking system prior to the commencement of work.
Results and dates of individual tests are to be provided to the system as
they are performed. Any failed test results will have retests performed,
entered into the system, and cross-referenced. The tracking system must
be reviewed regularly to ensure that any ongoing activity has all planned
tests accomplished as scheduled.
6.2.5 COMPLETION OF WORK
• Testing of accomplished systems: Testing of completed systems

shall be performed as obligatory according to the technical specifi-
cations of the contract.
• Contractor punch-out: Close to the completion of all work or
any part thereof, the contractor prepares a punch list and performs
corrections. QA personnel shall not prepare the contractor’s defi-
ciency list. The contractor should correct deficiencies promptly so
that project schedules are achieved. All major deficiencies noted
throughout this contractor’s punch-out inspection must be cor-
rected prior to the pre-final inspection.
• Pre-final and final inspections: Contribution in the pre-final and
final inspections will be provided by QA and QC personnel. The
QC manager will assure that all deficiencies noted during the pre-
final inspection are fixed prior to the final inspection and report
the status of corrective actions to the government. The client/
customer is invited to the final inspection. Any deficiencies noted
at these inspections by client/customer personnel, whether design
or construction related, will be examined by the government and
the contractor is notified if corrective action is required under the
terms of the contract. All significant deficiencies must be corrected
prior to handing over.
• Complete as-built drawings: As-built drawings are updated
frequently throughout the project. During the final stages of
c onstruction, the QC manager will review and complete these draw-

ings. While the status of as-built drawings is a concern throughout
the project, it is important to tie up any loose ends as the project
comes to a close.
• Operations and maintenance (O&M) manuals: The QC manager
will assure submittal of all required operation and maintenance data
according to scheduled submittal dates.
• Instruction and training procedures: If the contract requires
operation and maintenance training of client/customer personnel,
the QC manager shall ensure that all identified training has been
conducted by qualified instructors.
• Materials turnover: The QC manager will verify that all required
keys, spare parts, and materials have been organized, identified,
and proven to be usable prior to final inspection.
• Warranty: The QC manager shall ensure that all warranty informa-
tion is presented. Procedures for warranty notification and correc-
tion should be in place. Certain warranties of construction declare
that the general warranty period for construction work is one year
from the time of acceptance by the government unless otherwise
stated in the specifications. If the manufacturers of individual items
offer a longer warranty, this extended warranty period accrues to
the government. If the contractor repairs or replaces a component of
the project during the warranty period, then this component could
be warranted for one year from the repair or replacement date.
6.3 SAFETY MANAGEMENT FOR CONSTRUCTION

PROJECTS
This section contains the fundamental policies for safety management

and technical guidance on specific methods for safe execution of works in
order to prevent work-related accidents and public accidents in construc-
tion projects for public and other facilities. By understanding this section
and complying with the regulations herein, project stakeholders will be
in a position to respect the basic human rights of all parties involved in
construction projects. This will help preventing the occurrence of work-
related and public accidents by generating a culture of safety.
6.3.1 SAFETY MANAGEMENT PLANS
Two plans for the safety management for construction work sites shall be
prepared and performed by the contractor, namely, the “Safety Plan” and
“Method Statements on Safety.” The contractor shall prepare the Safety

Plan in the preconstruction stage. The contractor shall however develop
Method Statements on Safety in the construction stage.
Table 6.1 represents the differences between Safety Plan and Method
Statements on Safety in terms of particular references as indicated.
Table 6.1. Safety plan versus Method statements on safety

Method statements on
Ref. Safety plan safety
Preparation Prepared by the contrac- Prepared at the construc-
tor at the preconstruction tion stage to be delivered
stage to be submitted to to the employer/engineer
the employer/engineer for for approval.
approval.
Role Is considered the basic Describe a detailed meth-
plan for safety manage- odologies to follow and
ment in construction works manage safety in construc-
at the site and constitutes tion projects and comprise
basic policies on the gen- specifics for the safe imple-
eral safety management mentation and measures
and operation for the entire for each type of work in
works on the site. accordance with the exe-
cution plans which defines
the method or sequence for
implementation.
Items to be Indicated later in this Indicated later in this
incorpo- chapter. chapter.
rated
Timing for Submitted by the contrac- Submitted prior to the

submission tor to the employer/engi- beginning of the pertinent
neer at the time specified works according to the
in the tender documents. If execution plans or their
no submission deadline is comparable document.
stated in the tender docu- If the submission date is
ments, it shall be delivered indicated in the tender
no later than seven days or documents or other
any other period accord- applicable documents,
ing to the system of the then this deadline shall be
country where the project followed.
is performed, prior to the
commencement of the
related works.
(Continued)
Table 6.1. (Continued)
Method statements on
Ref. Safety plan safety
Review Reviewed by the Reviewed by the
employer/engineer taking employer/engineer from
into consideration the the perspective of pre-
necessity to preserve serving safety throughout
safety during construction different construction
work on the site. works on the site.
6.3.2 Roles and Responsibilities of Project Stakeholders
The roles and responsibilities of project stakeholders shall be clearly spec-

ified in the tender and Table 6.2 represents a guidance for it.
Table 6.2. Roles and responsibilities of project stakeholders

Stakeholder Roles and responsibilities
1. Shall endeavor to encourage all project stakehold-
ers positively to enhance safety on construction
sites.
2. Shall in accordance with the engineer review the
Safety Plan and the Method Statements on Safety
prepared by the contractor and deliver notice,
suggestion, or guidance for improvement to the
contractor if there are any risks to safety.
3. Shall in accordance with the engineer make sure
the work is implemented in accordance with the
Employer prepared by the contractor and deliver notice, sug-
gestion, or guidance for improvements.
4. Shall inform the contractor of social, natural, or
any other conditions which may influence the
management of safety for construction works.
5. Shall enhance coordination on safety management
when two or more contractors execute work on the
same construction site.
6. Shall firmly comply with the pertinent laws and
regulations of the country where the project is
executed to ensure the safety of the project stake-
holders during construction works on the site
and protect adjacent local residents and any other

third parties from every accidental risk foreseen to
emerge from the construction works on the site.
1. Shall together with the employer, properly perform
activities to manage safety including these com-
mitments identified in the contract documents and
according to the roles and responsibilities of the
employer.
2. Shall in accordance with the employer review the
Engineer prepared by the contractor and deliver notice, sug-
gestion, or guidance for safety enhancement to the
contractor if there are any risks foreseen.
3. Shall in accordance with the employer make sure
the work is implemented in accordance with the
prepared by the contractor and deliver notice, sug-
gestion, or guidance for improvements.
1. Shall appropriately prepare the Safety Plan at the
proper time in the preconstruction stage in compli-
ance with the pertinent laws and regulations of the
country where a project is constructed and these
guidelines. In the construction stage, the contrac-
tor shall properly prepare the Method Statements
on Safety to carry out safety measures prior to
the beginning of each item of work and deliver
the document to the employer and consultant for
review.
2. Shall make appropriate revision or correction
whenever any deficiency or recommendation for
Contractor
enhancement concerning safety is raised by the
employer/engineer following the review of the
Safety Plan and the Method Statements on Safety.
3. Shall be accountable for the procedures and man-
agement of safety on construction sites.
4. Shall in appropriate time update and deliver the
documents for review by the employer/engineer
after applying the required modifications based on
the latest site, social, environmental, or any other
conditions or notices and carry out the construction
work according to the latest revised and approved
versions of safety plans.
(Continued)
Table 6.2. (Continued)
Stakeholder Roles and responsibilities
5. Shall implement construction works considering
the safety of near local residents and any other
third parties as well as project stakeholders.
1. Shall constitute and maintain safe and clean site
conditions in accordance with the instructions of
the contractor.
2. Shall execute construction works in accordance
with the pertinent laws and regulations of the
guidelines.
Subcontrac-
3. Shall receive from the contractor clarifications
tors
on the Safety Plan and the Method Statements on
Safety and circulate it to the employees and have
them fully conform to those clarifications to ensure
safety.
4. Shall collaborate with other subcontractors
involved on the construction site according to the
instructions of the contractor.
1. Shall conform to the Safety Plan and the Method
Statements on Safety developed by the contractor,
instructions given by the contractor and the man-
agers, and the rules governing the entire construc-
tion works on the site.
2. Shall perform construction work in accordance
with the pertinent laws and regulations of the
Workers
guidelines.
3. Shall utilize protective equipment for safety in a
proper function and at the appropriate time and
location when undertaking work.
4. Shall concentrate and pay attention to own safety
as well as to the safety of coworkers, all project
stakeholders, as well as the nearby local residents
and any other third parties influenced by the work.
6.3.3 BASIC POLICIES FOR SAFETY MANAGEMENT
6.3.3.1 Basic Principles of Safety Management
1. Safety is a high priority. A high priority on safety should be

placed by all project stakeholders and their best endeavors should
be exerted to prevent the occurrence of accidents.
2. Thorough compliance with relevant laws and regulations.

3. Elimination of causes and thorough precautions. Every potential
hazard in each construction procedure and stage should be iden-
tified and analyzed by the contractor in order to take appropriate
action for removing the causes of such hazards and ensure the safe
implementation of the work.
4. Thorough prevention of public accidents. All project stakehold-
ers shall employ safety management measures taking appropriately
the interests of third parties into consideration in order to prevent
public accidents.
5. Appropriate implementation of plan–do–check–act (PDCA)
cycle for safety management.
6. Proper sharing of information and participation of all project
Stakeholders. All project stakeholders shall actively contribute in the
activities related to safety management and share all safety-related
information they possess in a suitable manner and always accessible.
6.3.3.2 Compliance With Relevant Laws and Regulations
In addition to the safety guidance, the contractors shall carry out projects
in accordance with all pertinent laws and regulations of the country where
a project is constructed.
The contractors shall review all pertinent laws and regulations appli-
cable to construction work in the country where a project is constructed
in advance of commencement of the project. The employer/engineer shall
deliver information on the pertinent laws and regulations to the contrac-
tors and provide maximum support to the contractors on the procedures
that they should employ as per the pertinent laws and regulations.
The contractor shall prepare the Safety Plan and its Method State-
ments on Safety in accordance with the pertinent laws and regulations.
The employer/consultant shall review the pertinent laws and regula-
tions noted therein and guide the contractor to take into consideration
any supplementary laws or regulations not considered by the contractor.
The employer/consultant shall review the contractor’s compliance with
the pertinent laws and regulations on a regular basis and guide him to the
necessary actions required.
6.3.4 Plan–Do–Check–Act (PDCA) for Safety Management
The basic concept of PDCA for safety management shall be the cycle of
“plan, do, check, act,” with “plan” being the process of developing the
Safety Plan and its Method Statements on Safety, “do” being the partic-
ular implementation of the plan accordingly established, “check” being
the review and endorsement of the safety management process, and “act”
being the employment of enhancements to the implemented plans based
on the past performance to ensure the continuous improvement of field
site safety standards. The cycle of these processes are identified as PDCA
for safety management. The contractor shall have primary responsibility
for the implementation of safety management.
As for the “plan,” the Safety Plan as the basic safety management step
and the Method Statements on Safety as the more detailed safety manage-
ment plan for implementation shall be developed by the contractor. The
items identified by the contractor essential to ensure safety at construction
sites shall be documented and circulate it to all project stakeholders to
ensure that those items are fully perceived at the “planning” stage.
As for “do,” The contractor shall implement the safety management
procedures on construction sites in accordance to the developed safety
plan and its method statements on safety as established at the “planning”
stage.
As for “check,” the employer/engineer shall follow up and review
the contractor’s implementation of the “do” stage in compliance with the
developed safety plan and method statements on safety and issue instruc-
tions for corrective actions where it is in any unsatisfactory manner or
incorrect. The implementation of “do” stage is checked by the contractor
and appropriate enhancements are employed where unsatisfactory in any
manner is revealed. The safety managers shall make reviews and perform
checks on a regular basis. The results of the “check” stage shall be docu-
mented and circulated to all the project stakeholders.
As for “act,” particular methods of employing safety measures or
relevant management systems shall be surveyed by the contractor and then
apply corrective action according to the results at the “checking” stage.
Furthermore, the Safety Plan and the Method Statements on Safety shall
be reviewed by the contractor and then deliver revised versions to the
employer/engineer for auditing and approval.
When the Safety Plan or the Method Statements on Safety is revised,
the revision shall be recorded by the contractor and revealed to the project
stakeholders. In other words, the contractor shall illustrate the types of
work to which a change is to be employed and before this ensure that the
change is properly perceived by relevant workers.
In case a work-related accident occurs, construction work shall
be suspended by the employer, engineer, and contractor to the extent
required during the necessary period and investigate the causes. The
causes of the accident shall be eliminated by the contractor in c ompliance

with the basic principles of safety management. Then the contractor
shall clarify measures to prevent the risk of accidents taking place, and
resume work after the approval of the employer. The Safety Plan and
the Method Statements on Safety shall be examined by the contractor
based on the results of the investigations and adjust them accordingly
as necessary. The employer/engineer shall audit and approve the safety
documents if revised.
For safety continuous improvement, the contractor shall ensure that
the PDCA safety management process is employed and always enhanced
in order to preserve safety on construction sites.
6.3.5 Contents of the Safety Plan
Items for inclusion in the Safety Plan: A typical Safety Plan shall encom-
pass the following:
1. Basic policies for safety management

2. Safety management organizational structure
3. Employment of the PDCA cycle
4. Observations and monitoring
5. Managing emergencies and unforeseen conditions
6. Safety learning and training
7. Unpaid safety management activities
8. Dissemination of information
The above items shall establish the Safety Plan which is applied com-
monly to all construction projects. The contractor shall integrate all those
items into the Safety Plan in addition to any other items which emerge
according to the scope of work or the conditions for construction.
6.3.5.1 Basic Policies for Safety Management
The basic policies for safety management applicable during construction

shall be defined by the contractor according to pertinent laws and regu-
lations of the country where a project is constructed, the scope of work,
the environment where the works are implemented, tender d ocuments,
and other documents or data, as applicable, included into the contract.
Likewise, the basic policies of the managing office are advised to
be defined.
6.3.5.2 Safety Management Organizational Structure
An internal organizational structure to manage safety and prevent acci-

dents on construction sites shall be developed in compliance with the
basic policies and the following requirements:
1. Employment of appropriate personnel including a supervisor

accountable for safety management, safety officers, and safety
engineers within an internal organizational structure and illustrat-
ing their particular roles, responsibilities, and authority.
2. It is advised, in compliance with any requirements under the con-
tract documents, to establish an appropriate structure to manage
safety, such as a safety committee, which may consist of appro-
priate representatives from project stakeholders including the
employer, consultant, and subcontractors. The names of individual
persons are not required to be stated in the Safety Plan within the
tender documents.
6.3.5.3 Employment of the PDCA Cycle
The basic principles for enhancing the PDCA cycle on construction sites
shall be developed in compliance with “PDCA for Safety Management.”
6.3.5.4 Observations and Monitoring
The basic principles for observing and monitoring safety management

shall be established by the contractor while in accordance with the follow-
ing requirements:
1. Checks at all areas on the site shall be performed by the contrac-

tor to investigate the extent of implementation compliance with
the defined Safety Plan. Likewise, checks to evaluate the extent of
implementation of strategies for the safe execution of each type of
work in accordance with the Method Statements on Safety shall be
carried out by the contractor.
In the event of injury attributable to a work-related accident
or construction work, the contractor shall instantly report to the
employer/engineer, in accordance with the contract documents.
The employer/engineer on receiving such report shall notify the
concerned governmental organization of the accident or injury in
a ccordance with the pertinent laws and regulations of the country

where a project is constructed and the contract documents. Records
of all such reports shall be retained by the employer, engineer, and
contractor and preserved until the completion of the work.
Information on unsafe incidents that do not result in work-related
accidents but may lead to such accidents “near-misses” shall
be compiled, analyzed, and used to prevent future work-related
accidents. The contractor’s employment of safety management

principles shall be observed by the employer/engineer in order to
provide appropriate directions to the contractor when any safety-
related issues are found.
6.3.5.5 Managing Emergencies and Unforeseen Conditions
The policies for responding to emergencies considered to be caused by

accidents shall be developed by the contractor taking into consideration
the following guidelines:
• Identifying systematic procedures for responding to emergencies

• The employment of communication network system for emergency
• Saving human lives is of top priority
• Raising awareness of first aid treatment
• Reporting on and documenting accidents and injuries
Likewise, the policies for responding to any unforeseen conditions

considered to be caused by natural disasters such as rainstorms or earth-
quakes shall be developed by the contractor taking into consideration the
following guidelines:
• Employing procedures for emergency evacuation

• The employment of a communication network system for emer-
gency
• Employing procedures for responding to unforeseen circumstances
• Following up, recording, and analyzing weather information
6.3.5.6 Safety Learning and Training
The basic principles for learnning and training on safety shall be devel-
oped by the contractor to enhance safety management throughout the
construction works taking into consideration the following guidelines:
• Compliance with pertinent laws and regulations of the country

where a project is constructed while learning and training on safety
• Learning all project stakeholders and all new participants to the
site on
 An induction and overview of the construction site
 General rules on the construction site comprising the Safety
Plan
 Basic actions necessary to ensure safety when executing work
 Corrective and protective actions
• Tutoring on the Method Statements on Safety for the scope of work

and stages
• Learning the procedures when changes are applied to work
• Learning and training for special workers
 Workers involved in tasks that are governed by the laws and
regulations of the country where a project is constructed

 Workers involved in explosives and managing blasting work
 Workers involved in tasks that utilizes compressed air
 Drivers or operators of construction machinery or equipment
 Workers involved in work at shafts, excavated areas, under-
ground passages, or tunnels.

 Workers engaged in reinforcing steel work, concreting work, or
formwork
 Workers engaged in other kinds of special categories of work
• Learning and training personnel for emergency response

• Learning third parties other than project stakeholders on safety pro-
cedures when they visit the construction site
• Training for managing emergencies and unforeseen conditions
• Training on first aid treatment
• Simple language to be used for learning and training
6.3.5.7 Unpaid Safety Management Activities
The basic principles for unpaid or voluntary safety management activities

shall be developed by the contractor taking into consideration the clauses
in the contract documents dossier, and the following guidelines:
• Morning, regular monthly meetings on safety and periodic inspec-

tions
• Identifying potential dangerous activities
• Sorting and cleaning
• Safety agreements
• Developing near-miss reporting system
6.3.5.8 Dissemination of Information
The basic principles for disseminating essential information to assure

effective safety management shall be developed by the contractor taking
into consideration the following guidelines:
• Description of learning and training for new participants

• Any other information required to preserve safety
6.3.6 CONTENTS OF THE “METHOD STATEMENTS ON

SAFETY”
6.3.6.1 Configuration of the “Method Statements on Safety”
Method Statements on Safety for each type of work shall be developed

by the contractor based on the design documents in order to accurately
and professionally execute the required work, maintain a safe working
environment, and prevent any unsafe practices by workers. The following
items shall be included by the contractor in any Method Statements on
Safety:
1. Identification of the specifications and quantity of any construction,

tools, plant and machinery to be utilized for the works.
2. Identification of the specifications and quantities of any major
materials required for the works.
3. Inclusion of the required qualifications and licenses obligatory for
each type of work.
4. I Inclusion of the order of command for the works specifying the
pertinent supervisors for each type of works especially in cases
when involving subcontractors and the process for observing the
execution of works is unclear. As such, in order to circumvent any
confusion, the Method Statements on Safety should stipulate the
pertinent supervisors for each type of work including subcontract
works.
5. Classification of each item of work and execute it in accordance
with the work schedule.
6. Determination of the procedures for the execution of major work

operations for each type of work.
7. Inclusion all foreseeable risks for each work package.
8. Inclusion of precautionary measures to prevent or mitigate occur-
rence of potential risks, incorporating information on the type of
protective actions required.
6.3.6.2 Technical Guidance for Safe Execution of Works
Predefined Technical Guidelines, like OSHA standards, for example,

presents the minimum safety standards for the management of safety and
accidents that are generally applied in construction projects according
to the type of works in question. The Technical Guidelines is commonly
employed when the contractor plans and performs the safety management
principles and the consultant audits and approves the actions.
It is advised that prior to setting out an agreed plan and procedure for
the execution of works, safe work methods, procedures and strategies for
safety be fully investigated considering potential risks of accident, if any,
with reference to the Technical Guidelines predefined. Then the results of
that review be presented in writing in a Method Statements on Safety in
order to remove or mitigate the risk of accidents occurrence.
CHAPTER 7
Communication Management
7.1 INTRODUCTION
This chapter addresses some of the concepts, definitions, and procedures

of managing the meetings and documentation of construction process.
The construction phase begins with the issue of Notice to Proceed
(NTP) to the contractor. The consultant shall provide, as a minimum, the
following services during construction administration:
1. Attend construction gatherings/meetings as per project manager’s

guidelines.
2. Visit project site at appropriate intervals; complete observation
reports.
3. Review and process submittals as fast as possible to standard sys-
tems prepared by the project manager with respect to stamping and
filing submittals.
4. Interpret contract documents.
5. Review and assess contract records.
6. Prepare and arrange change orders.
7. Support project manager in testing, perception and final approvals
review.
7.1.1 INCONSISTENCIES IN DOCUMENTS
On the off chance that the expert finds any irregularities, discrepancies
in cross-references, exclusions, ambiguities in the approval issued for
construction documents, or change orders in the construction documents,
he might immediately inform the proprietor. If the proprietor acknowl-
edges that mistakes or omissions in those documents exist and should be
amended, the consultant might make the expected modifications to the
documents at no cost to the proprietor.
7.2 CONSTRUCTION MEETINGS
(a) Preconstruction conference: The consultant should go to the

meeting set by the project manager. The preconstruction meeting
is a general review with the contractor of all the contract prereq-
uisites. A summary or flowchart for administrative communication
might be distributed, discussed, and modified as necessary, subject
to endorsement of the project manager.
(b) Prework meetings: The quality control requirements of the con-
tract documents ordinarily require the contractor to set up prework
meetings at each stage of work and sometimes at each exchange
preceding start of work for that stage. The consultant might go to
these meetings and ensure that its delegates are proficient in the
concerned design discipline and familiar with the contractor’s
scope of work. The consultant’s delegates might likewise be com-
pletely familiar with actual construction materials, methods, flow
of work, and so on.
(c) Weekly meetings: The consultant should go to weekly construc-
tion and procurement meetings and other similar meetings that
the project manager decides are required to maintain construction
schedules and quality. The consultant might incorporate the meet-
ing notes in the consultant observation report.
(d) General communication: All parties must utilize effective ways
to convey and communicate to speed up execution of the work.
Verbal, e-mail, fax, and written correspondence among the proj-
ect manager, consultant, contractor, and other related individuals,
insofar as choices as concerned, are encouraged, and results are
documented in writing for endorsement and transmittal by the proj-
ect manager as contractually binding communications. E-mail and
fax correspondence must be acknowledged with a confirmation of
receipt. Verbal communication must be acknowledged in writing
and on-site discussions documented by the consultant in the con-
sultant observation report.
7.3 REVIEW OF CONTRACTOR SUBMITTALS
(a) In general, all documents prescribed in the contract documents and

certain other written communications are submitted to the Project
Manager unless otherwise determined in the contract documents
or generally coordinated by the project manager in writing. The
Communication Management • 143
consultant’s Contractor Document Submittal Report (CDSR) shall

include a listing of the quantity of duplicates and names of par-
ties to whom the contractor should convey submittals, specifically
keeping in mind the end goal to assist the submittal review.
(b) The CDSR should contain all submittals needed to the contractor.
The contractor’s schedule submittal should match the CDSR.
(c) The consultant shall be accountable for review and return of sub-
mittals to the project manager and contractor within a predefined
period unless notified in writing by the project manager.
(d) The consultant shall arrange and keep current a log of submittals
showing status of submittals, date received, and date submitted to
subconsultants, and date returned to the proprietor. The submittal
log shall be available at each construction meeting for review.
1. The consultant should audit all contractor submittals for confor-
mance with the design concept of the project and the contract
documents, including, but not limited to, all drawings, specifi-
cations, samples, certificates, product data, mix designs, mock-
ups, test information and results, test procedures, and other
contractor/procurement submittals required by the construction
contract documents.
2. All audits and approvals might be completed and submittals
returned to the project manager within a predefined period
after the consultant gets them, unless the project manager has
established a shorter review period for specific submittals in
writing. The returned submittal might include the consultant’s
remarks and any rectifications or revisions required to get
approval. Remarks might be on the submittal, not on inde-
pendent correspondence. Modifications of submittals might be
made in reproducible ink. No coloring or highlighting will be
accepted.
3. The consultant might not utilize shop drawings or contractor
submittals to make improvements to the contractor’s scope or
correct design errors and omissions. Completion of the design in
the shop drawing process is not acceptable. The design might be
finished at time of bid advertisement. If the consultant identifies
inadequacies in contract documents during review, the consul-
tant might promptly advise the project manager and review the
issues for further action.
(e) The consultant might specify, sign, and date the audit; the consul-
tant’s and sub consultant’s review stamp should have the following
different marks:
1. ACCEPTED means that the submittal appears to conform to the

contract documents.
2. ACCEPTED AS NOTED means that the submittal conforms to
the contract documents after incorporating changes according
to the reviewer’s remarks. Resubmittal is not required.
3. REVISE AND RESUBMIT indicates that the submittal is unac-
ceptable and shall be revised and resubmitted.
4. NOT ACCEPTED indicates that the submittal is not acceptable
and that a new submittal in accordance with the contract docu-
ments shall be made.
5. RECEIPT ACKNOWLEDGMENT indicates an item is received
by the project manager but no review was made. This mark is
for use in resubmitting items that were previously accepted as
noted and the contractor has integrated the notes and desires
the project manager’s staff to have the same material that the
contractor’s field staff is using.
(f) Review of an independent item will not constitute audit of a
component in which the item functions. The owner will withhold
approval of submittals that rely upon different submittals not yet
submitted. Audit and approval will not deter the contractor from
his duty regarding precision of submittals, conformity of submittal
report to prerequisites of contract drawings and specifications, sim-
ilarity of depicted product with contiguous products and whatever
is left of the framework, or completion of the contract as per the
contract drawings and specifications.
(g) The consultant might audit and react to contractor’s and project
manager’s remedial action requests (RARs) and non-conformance
requests (NCRs) sent to the consultant by the project manager. The
motivation behind these written solicitations is to remedy short-
comings in the work.
(h) The consultant should give clarifications and illustrations of the
contract documents in a timely manner, utilizing adequate supple-
mentary drawings, sketches, specifications, and guidelines to give
guidance to the involved contractors.
7.4 PROJECT RECORDKEEPING AND

DOCUMENTATION
7.4.1 GENERAL
In construction projects it is required to create and maintain an institution-

alized arrangement of documenting and archiving the work and payments
made. Project records must be precise and complete since they might be
subject to detailed review and audit by partners whenever applicable, even
years after project completion. They may likewise be required for settle-
ment of disputes between the contractor and the owner.
The chief inspector is accountable to ensure that all forms and
reports documenting the contractors operations, and additionally those
that might be required by different partners, are accurate and complete.
Notes and clarifications should supplement the records, if necessary, to
make the records as clear and complete as could reasonably be expected.
An example rundown of project records is given in the following text
(contingent on the particular project, other project records might also be
significant):
• Contract documents (plans, specification, etc.)

• Chief inspector’s log
• Inspector’s daily work report (DWR)
• Project volumes (and other documentation supporting contractor
payment)
• Project correspondences
• Minutes of meetings
• Change orders/instructions to contractors
• Compliance and noncompliance notices
• Construction orders (orders for additional work)
• Environmental forms and reports
• Others
7.4.2 FIELD RECORDS
This section outlines general standards to be utilized in creating the project

records:
• The records must be complete, and the data introduced such that
one not familiar with the project can comprehend what happened
and what the conditions were.
• Intentional twisting, changing, or falsification of any facts identi-
fied with the project is an infringement of law.
• The contract official record of the work will be the SiteManager
DWR alongside supporting archives. Any special case must be
endorsed by the construction division manager.
• Through the client’s affirmation of the computer use policy and
the SiteManager certification, the client confirms that data entered
is precise to the best of knowledge. The client is in charge of any
data entered under the client name and password. Passwords shall
not be shared.
• Project volumes of reports should be produced in an organized and
classified manner.
• The preparer’s full signature and printed name, and the date and
project number are required on all handwritten records including
scanned documents.
• Absolutely no deletions or whiteouts are permitted on documenta-
tion arranged by project personnel. On the off chance that an error
is made, the erroneous figure, item, or explanation is crossed out
and initialed. The correction might be made above it or elsewhere.
If the correction is made somewhere else, a reference to the revi-
sion is written over the crossed-out and initialed error.
• In general, project records are to be kept in the site office. The
inspection team should exert every possible effort to guarantee
that records supporting calculations and payment are put away in a
fire-resistant safe toward the end of the workday.
7.4.3 DIARIES AND INSPECTOR’S DWRS
Everyday records and daily DWRs are entered and maintained at Site
Manager’s office. The inspection team and supervisory personnel should
be guided by the Site Manager user guide for appropriate entry of data into
the Site Manager system.
The DWR, in conjunction with the diary and attachments, is
viewed as the source record. The purpose of the diary and DWR is to
record the daily activities and events relevant to the project, record pay-
ments, comply with the contract conditions, and record field conditions.
These reports give significant data and proof in case of contractual dis-
putes and legal actions. To this end, it is imperative that the records be
comprehensive, up to date, and maintained in a consistent way in all
departments.
The SiteManager diary is entered by the chief inspector or resident
engineer to track time (i.e., elapsed days, calendar days), to approve the
DWRs entered by inspection team, and to record pertinent data with
regard to the project. Every diary must contain a concise brief of the field
operations covered by every inspector under the chief inspector. The diary
should also note the work hours of the inspection team, log any official
guests to the project, and record the chief inspector’s/resident engineer’s
activities for the day. On the off chance that contractor activity does not
require that a DWR be completed for a given day, the diary should incor-
porate a summary of all conditions and actions related to the administra-

tion of the contract.
The Site Manager DWR and supporting data is the official documen-
tation of the contract work implemented on the project. The inspector
should make every effort to create a record that is clear, succinct, and
complete. A DWR is required when there is construction activity whether
performed by a contractor, Utility, or any other entity. A DWR is likewise
required to make contract payments. A DWR needs to be entered into Site
Manager system every day by all field staff involved in the inspection of
contract work.
7.4.4 PROJECT CORRESPONDENCE
To appropriately distinguish project-related correspondence, both the loca-

tion and project information are to be mentioned. The official duplicate of
project correspondence is to be kept in the main office. The supervising
engineer is required to establish and maintain a complete chronological
file of all project related correspondence for each project relegated to him/
her. Whenever necessary, duplicates of correspondence are to be sent to
the Project site office for their records. Correspondence received in the site
is to be sent to the main office.
E-mail: E-mails are contract records and might be liable to point-by-
point review; along these lines, project-related e-mail, sent and received,
must be printed and kept in the correspondence folder. An exemption
might be permitted if the project maintains an electronic database of
project records. E-mail arranged by project team must always be profes-
sional and to the point.
7.4.5 PROGRESS MEETINGS
Progress meetings are required to be held monthly at least on ongoing

projects, apart from times when no activity is happening on the project.
The reason for the meeting is to talk about the project progression of the
work and any issues, which may affect the workflow. The meeting should
be directed by the chief inspector or project engineer. Where suitable,
action items ought to be defined and responsible parties allocated particu-
lar tasks. Each task should be given a due date and followed until s ettled.
The chief inspector is in charge of setting up a report of the meeting. The
project engineer must guarantee that the report of meeting is precise.
The report of meeting should be arranged, assessed, and be ready for dis-

tribution within five working days of the date of the meeting.
The following themes should be discussed at each meeting and incor-
porated into the minutes of meeting minutes:
• Contractor’s progress and audit of project’s schedule

• Quality and workmanship
• Utilities
• Environmental concerns
• Submittals
• Maintenance and protection of traffic/work zone safety
• Testing
• Civil rights
• General concerns
7.4.6 FINAL REVISIONS OF AS-BUILTS (PLANS AND CROSS

SECTIONS)
The Chief Inspector must ensure the data important to produce the as-built
drawings are kept to date on working plans as the project advances. At the
very least, the working plans must be updated every other week. Occasion-
ally, as a feature of the audit of project records, the project engineer has
to confirm that as-built plans are being updated simultaneously with the
physical work on the project and note this review by initialing and dating
the front sheet of the white paper as-builts. When the contractor is required
to create as-built drawings (i.e., electrical or construction projects), the
chief inspector must to occasionally help the contractor to remember the
prerequisite to submit as-built drawings and request a status.
7.4.7 SUBSTANTIAL COMPLETION AND HANDING OVER
(a) The consultant shall decide when the work is substantially com-
plete.
(b) When the contractor considers that, in his opinion, the work is
substantially complete and ready for inspection, the contractor
submits notice to the consultant, along with a rundown of items
yet to be finished and additionally adjusted. The consultant shall
audit the contractor’s rundown of incomplete items and shall
inspect the project site with the project manager and contractor to
assess the work progress. The consultant might add items observed

to be inadequate and missing from the contractor’s rundown. In
the event that any item or quantity of items or the extent of incom-
plete/uncorrected work is to such an extent that the consultant or
the project manager decides the work is not substantially complete,
the contractor shall be informed to finish those items before resub-
mitting his notice.
(c) When the rundown of incomplete/uncorrected work is reduced
such that the consultant decides the work is substantially com-
plete, the consultant shall issue the substantial completion punch
list, including the contractor’s schedule for finishing the work, and
consequently notify the project manager by sending a notice of sub-
stantial completion.
(d) In order for the whole or a segment of the project to be delivered,
notice of substantial completion must be issued (aggregate or frac-
tional), The proprietor has the privilege to possess and utilize any
finished or partially finished segment of the project, even if the time
for completion has not been reached and/or the project has not been
finally accepted. Such possession and use does not constitute final
acceptance of the possessed parts of the project. Before any occu-
pancy, the consultant shall participate with the project manager and
the contractor in an assessment of the work performed to decide
whether required conditions for occupancy have been achieved
or not.
(e) Notice of partial substantial completion and notice of approval of
partial occupancy/use might be issued for a segment of the work as
an alternative at the sole discretion of the proprietor’s p rincipal rep-
resentative when proportional required conditions for fulfillment
and occupancy of that segment have been achieved.
7.4.8 FINAL ACCEPTANCE AND CLOSEOUT
The owner makes final acceptance of the work in light of written confir-
mation by the consultant that
1. The Notice of Approval of Occupancy/Use has been fully

performed.
2. All items on the final punch list have been finished.
3. The contractor has submitted the as-built drawings, specifications,
and project logs to the architect/engineer, and the architect/engineer
has revised the submittal for compliance with the specifications and
approved the submittal to serve as appropriate for production of the
record documents.
4. Guarantee/ensure documentation requirements are achieved.
5. Operations and maintenance (O&M) manuals, instructions, guides,
and charts have been submitted. The architect/engineer has revised
the O&M materials for compliance with specifications and, if
accepted, has conveyed to the project manager for examination and
approval.
6. Permanent keys, access devices, and instructions’ sinages have
been completed.
7. Contractor’s temporary work has been removed, including cleaning
up and debris elimination.
8. Owner staff are instructed in system and equipment operations as
necessary according to contract.
9. Final change orders have been performed and the consultant has
delivered a final statement of accounts to the project manager
reflecting any adjustments to the contract quantities and amounts.
The principal representative does not approve final payment until all
items on the punch list are performed, Notice of Acceptance delivered,
and Notice of Contractor’s Settlement Date is reproduced.
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Index
A as-built drawings, 127–128, 148

acceptance and closeout, 149–150 attention, contract, 62
accessible temporary egress, 22
access to worksite (site B
coordination issues), 3 barricades, warning signs, and
accomplished systems, testing of, lights installation, 29
127 best practices, 58–59
actual cost of work performed Beximco Pharmaceuticals Ltd. v.
(ACWP), 109 Shamil Bank of Bahrain EC
admeasurement contract, 70 (governing law clause), 81
administration, contract bill of quantities contract, 70
claims, 77–78 budget at completion (BAC), 109
conditions, 74–75 budgeted cost of work performed
documents, 72–74 (BCWP), 108–109
special conditions, 76–77 budgeted cost of work scheduled
standard forms, 75–76 (BCWS), 108
advanced payment, 102 building information modeling
agreement, contract, 62 (BIM) style, 53
analysis, construction design, 48 build-operate-transfer (BOT)
analytical hierarchy process, approach, 67
37–38
annual repair/maintenance C
estimate, 93 cash flow, 98–99
anti-dispute arrangements computations, 104–105
(contract), 84–85 contract, 102–105
appropriate form, contract, 62 negative, 105
appropriate subject matter, causes and thorough precautions,
contract, 62 safety management, 133
approximate estimate, 93 change order and variation
arbitration, 81 (contract), 83–85
architect’s instruction (AI), 84 coding, 59
artificial intelligence, quantitative communicating activities, 8
risk analysis, 116 communication skills, 45
156 • Index
company cash flow, 98 multi-contractor projects, 12–13

competent parties, contract, 62 project manager and, 11–18
conceptual cost estimate, 93, responsibilities of, 14–18
94–95 separate control of design and
conditions of contract, 74–75 progress, 12
consent of the parties, contract, 62 construction manager’s instruction
constraints, contract, 64 (CMI), 84
construction claims, contract, construction phase, responsibilities
77–78 matrix, 18–21
construction communication construction planning/schedule
management review, 54–55
contractor document, 142–144 best practices, 58–59
inconsistency, 141 consideration, 56–57
meetings, 142 factors, 57–58
recordkeeping and standard coding, 59
documentation construction project, 87–88
acceptance and closeout, construction-scheduling engineer,
149–150 55–56
as-built drawing, 148 considerations, 56
correspondence, 147 elements, 57–58
diary and DWR, 146–147 standard activities, 56–57
field records, 145–146 construction-scheduling process.
general, 144–145 See construction planning/
progress meeting, 147–148 schedule review
substantial completion and construction site coordination, 1
handing over, 148–149 activities, 4–5
construction design communicating, 8
design review, 49–50 controlling, 7–8
consultants, 52–54 facilitation, 6–7
good design, 50 provision of leadership, 6
impact, 51 recording, 8–9
participates, 50 construction engineer, 9–11
purpose of, 49 construction manager, 11–18
report, 52 execution, 23–25
timing of, 50–51 informational submittals, 22
working, 50 issues, 2–3
development, 48–49 management system-related
planning arrangements, 47–48 causes, 3, 4
construction engineer, 9–11 operation, termination, and
construction information (site removal, 29–30
coordination issues), 2 quality assurance, 22
construction manager responsibilities matrix, 18–21
design development, 14 security and protection facilities
employer/contractor joint installation, 27–29
venture, 14 staffing-related causes, 3, 4
Index • 157
support facilities installation, contractor, roles and responsibility

25–27 of, 131–132
technical-related causes, 3, 4 contractor, selection of, 78
construction strategies, 31–33 contractual relationships, 68, 69
combination, 39–40 controlling activities, 7–8
creation, 34–35 coordination activities, 9
decision, 35 coordination function, 1
project and technical, 33–34 core design team, risk
sorting/classification, 35–39 identification, 113, 114
consultants, information for, 52–54 correspondence, project, 147
contract. See also Federation cost estimation, 87–90
Internationale Des Ingenieure- estimator, 90
Conseils (FIDIC); project objective of, 90–91
delivery methods production rates, 98
administration project cost, 91–92
conditions, 74–75 quantity takeoff, 97–98
construction claims, 77–78 types, 93–94
documents, 72–74 conceptual estimate, 94–95
special conditions, 76–77 detailed estimate, 95–97
standard forms, 75–76 semidetailed estimate, 95
change order and variation, cost management. See also specific
83–85 cost
components, 62 estimation (see cost estimation)
constraints, 64 project control, 105–106
contractor, selection of, 78 EV technique, 108–111
definition, 61–62 issues, 106
governing law clause, 79–83 scheduled project, 106–108
objectives, 63–64 project finance, 98–99
steps, 62 cash flow, 102–105
strategy, 61 project income, 101–102
subcontracting, 79 S curve, 99–100
types cost performance index (CPI),
admeasurement, 70 111
cost-reimbursable, 70–71 cost projection, 88
lump-sum, 68–69 cost-reimbursable contract
target cost, 71 (cost-plus contract), 70–71
T&M, 72 cost variance (CV), 111
contract cash flow, 102–105 covered walkway installation, 29
contractor document, 142–144 Crystal Ball software, 117–118
Contractor Document Submittal
Report (CDSR), 143 D
contractor punch-out, 127 decision, construction design, 48
contractor quality control (CQC), decision trees (DT), quantitative
120, 123–125 risk analysis, 115
158 • Index
deficiency tracking system/rework employer, roles and responsibility

item list, 125 of, 130–131
dehumidification system engineer, roles and responsibility
installation, 24 of, 131
deliverables, construction engineer’s instruction (EI), 84
engineer, 11 environmental protection
design-build approach, 66 installation, 27
design development, 14 equipment provision (site
design review, 49–50. See also coordination issues), 3
review construction plans estimate at completion (EAC), 111
design review report, 52 estimate to complete (ETC), 111
detailed cost estimate, 93–94, estimation, 114
95–97 estimator, 90. See also cost
detailed estimate, 93 estimation
development plans, performance execution
management process, 44–45 installation, general, 23
dewatering facilities and drains temporary utility installation,
installation, 26 23–25
diary and DWR, 146–147 existing elevator use installation,
direct cost, 92 26–27
direct labor approach, 65–66 existing stair usage installation, 27
dissemination of information, 139 expected monetary value,
documentation, quality quantitative risk analysis, 115
management expenditure (cash out), 99
CQC report, 123–125 expenses, 99
deficiency tracking system/ Expert Choice program, 38
rework item list, 125 extension estimate, 93
QA report, 125
record-keeping and information F
exchange system, 123 facilitation activities, 6–7
documents, contract, 72–74 Federation Internationale Des
drafting (governing law clause), Ingenieure-Conseils (FIDIC),
82–83 75–76. See also contract
dust and HVAC control plan, 22 design development, 14
DWR, diary and, 146–147 employer/contractor joint
venture, 14
E multi-contractor projects, 12–13
earned value (EV) technique, separate control of design and
108–111 progress, 12
electric power service installation, feedback, performance
24 management process, 42–43
electric service, 22 field records, 145–146
e-mail, 147 finance. See project finance
employer/contractor joint venture, fire safety program, 22
14 fixed cost, 91
Index • 159
follow-up phase, three-phase initial phase, three-phase control

control system, 123 system, 122–123
formulation, construction design, initial response, risk identification,
48 114
inspections, 127
G installation
general communication, 142 security and protection facilities,
general installation, 23, 25 27–29
general overhead, 92 support facilities, 25–27
good design, 50 temporary utility, 23–25
governing law clauses (contract) installation, general, 23
defined, 79 Institute of Civil Engineering
drafting, 82–83 (ICE), 75
factors, 80–82 instruction and training procedure,
importance, 79–80 128
guidelines (change order and interfacing work to be completed
variation), 84–85 by other subcontractors (site
coordination issues), 2
H isolation of work areas in occupied
Halpern v. Halpern (governing facilities installation, 24
law clause), 82
heating and cooling installation, 23 K
heating, ventilation, and air knowledge acquisition, risk
conditioning (HVAC) control identification, 113
plan, 22
L
I learnning and training, safety,
identification, 114. See also risk 137–138
identification lifts and hoists installation, 26
illustrations, risk analysis, 116–118 lighting installation, 24
important vs. time-consuming lump-sum contract, 68–69
coordination activities, 4–5
communicating, 8 M
controlling, 7–8 maintenance facilities, 29–30
facilitation, 6–7 management system-related
provision of leadership, 6 causes, 3, 4
recording, 8–9 managers, performance
income (cash in), 99 management process and,
inconsistency in document, 141 45–46
indicators, EV, 110–111 material provision (site
indirect costs/overheads, 92 coordination issues), 3
informational submittals, 22 materials turnover, 128
information and participation, meeting, construction, 142
safety management, 133 method statements on safety,
information exchange system, 123 139–140
160 • Index
modeling and simulation, pest control installation, 28

quantitative risk analysis, 115 plan-do-check-act (PDCA),
modification, construction design, 133–135, 136
48 planned value (PV), 108
moisture and mold control plan, specification, and estimate
installation, 29 (PS&E) submissions, 56
moisture protection plan, 22 policies for safety management,
Monte Carlo simulation process, 135
117–118 preconstruction conference, 142
multi-contractor projects, 12–13 preconstruction phase,
responsibilities matrix, 18,
N 19–20
negative cash flow, 105. See also pre-final and final inspection, 127
cash flow preliminary cost, 93
Network Analysis System (NAS), preliminary phase, three-phase
124 control system, 122
non-conformance requests preparation for workplace (site
(NCRs), 144 coordination issues), 2
Notice to Proceed (NTP), 141 prework meeting, 142
price, objectives, 63
O priority matrix, 35–38
objectives, contract, 63–64 production rate, 98
objectives, performance professional construction
management process, 41–42 management (PCM) approach,
obligation, performance 67–68
management process, 40–41 progress meeting, 147–148
operations and maintenance project and technical strategies,
(O&M) manual, 128 33–34
operation, termination, and project cash flow, 98
removal, 29–30 project control, 105–106
organizational structure, safety EV technique, 108–111
management, 136 issues, 106
OSHA standards, 140 scheduled project, 106–108
project cost, 91–92
P project definition plan material, 53
parking installation, 26 project delivery methods, 64–65.
participates, 50 See also contract
performance management process, BOT approach, 67
40 contractual relationships, 68, 69
development plans, 44–45 design-build approach, 66
feedback, 42–43 direct labor approach, 65–66
and managers, 45–46 PCM approach, 67–68
objectives, 41–42 traditional approach, 65
obligation, 40–41 turnkey approach, 66
systematic progress, 43–44 project direct cost, 92
Index • 161
project finance, 98–99 R

cash flow, 102–105 recording activities, 8–9
project income, 101–102 recordkeeping, 123
S curve, 99–100 and documentation
project income (cash in), 101–102 acceptance and closeout,
project manager and construction 149–150
manager, 11 as-built drawing, 148
project manager’s instruction correspondence, 147
(PMI), 84 diary and DWR, 146–147
project organizational structure, 64 field records, 145–146
project overhead, 92 general, 144–145
project records, 145 progress meeting, 147–148
project-related correspondence, substantial completion and
147 handing over, 148–149
project scope, objectives, 63 remedial action requests (RARs),
project signs installation, 26 144
protection of existing facilities request for information (RFI), 83
installation, 27 request for proposal (RFP), 53
provision of leadership activities, Resident Management System
6 (RMS)/Quality Control System
public accidents, safety (QCS), 124
management, 133 response to site problem (site
coordination issues), 3
Q responsibilities matrix
QA personnel, 120, 125 construction phase, 18–21
QA report, 125 preconstruction phase, 18, 19–20
QA testing, 126 retention, 101–102
QC personnel, 121, 126 review construction plans, 49–50
QC report, 123–125 consultants, 52–54
QC testing, 125, 126 good design, 50
qualitative risk analysis, 112, impact, 51
114–115 participates, 50
quality assurance (QA), 22, 120 purpose of, 49
quality management, 119–120 report, 52
completion of work, 127–128 timing of, 50–51
definitions, 120–121 working, 50
documentation, 123–125 revised estimate, 93
testing, 125–127 risk identification, 112, 113
three-phase control system, core design team, 113
121–123 estimation, 114
quantitative risk analysis, 112, identification, 114
115–116 initial response, 114
quantity-based cost, 91 knowledge acquisition, 113
quantity estimate, 93 process to core team, 114
quantity takeoff, 97–98 risk management, 111–112
162 • Index
identification, 113–114 semidetailed cost estimate, 93, 95

illustrations, 116–118 sensitivity analysis, quantitative
qualitative risk analysis, 114–115 risk analysis, 115
quantitative risk analysis, separate control of design and
115–116 progress, 12
risk management planning, 112 severity, limits of, 117–118
risk monitoring and control, 112 sewers and drainage installation,
risk response planning, 112 23
rough cost, 93 short list of risk factors, 116–117
site enclosure fence installation, 28
S site plan, 22
safety, 132 SMART objectives, 42
safety management special conditions, contract, 76–77
laws and regulations, 133 specification, construction design,
method statements, 129–130, 48
139–140 staffing-related causes, 3, 4
PDCA for, 133–135 standard coding, 59
plan (See safety plan) standard forms, contract, 75–76
principles of, 132–133 stengths, weaknesses,
roles and responsibility, 130–132 opportunities, and threats
safety plan, 129–130 (SWOT), 38–39
dissemination of information, storm water control installation, 28
139 strategy, 31. See also construction
emergencies and unforeseen strategies
conditions, 137 subcontracting, 79
learnning and training, 137–138 subcontractor, roles and
observations and monitoring, responsibility of, 132
136–137 substantial completion and
organizational structure, 136 handing over, 148–149
PDCA cycle, 136 supervision facilities, 29
policies, 135 supplementary estimate, 93
unpaid, principles for, 138–139 SWOT. See stengths, weaknesses,
sanitary facilities installation, 23 opportunities, and threats
scheduled project, 106–108 (SWOT)
schedule of rates contract, 70 systematic progress, performance
schedule performance index (SPI), management process, 43–44
110
schedule variance (SV), 110 T
S curve, 99–100 target cost contract, 71
search, construction design, 48 Technical Guidelines, safety, 140
secondary objectives, 63–64 technical-related causes, 3, 4
security enclosure and lockup telephone service installation,
installation, 28 24–25
Index • 163
temporary egress installation, 29 time-consuming coordination

temporary elevator use installation, activities. See important vs.
26 time-consuming coordination
temporary enclosures installation, activities
29 time estimate at completion,
temporary erosion and 110–111
sedimentation control time, objectives, 63
installation, 27–28 timing of payment, 99
temporary facility changeover, 30 to-complete performance index
temporary fire protection (TCPI), 111
installation, 29 tracking system, 127
temporary partitions installation, traditional approach, 65
29 traffic controls installation, 26
temporary roads and paved areas tree and plant protection
installation, 25 installation, 28
temporary stairs installation, 27 turnkey approach, 66
temporary use of permanent roads
and paved areas installation, 25 U
temporary use of permanent stairs UNIDROIT standards, 82
installation, 27 unpaid safety management, 138–139
temporary utility installation,
23–25 V
tender price, breakdown of, variance at completion (VAC), 111
95–96 variation, change order and
termination and removal, 30 (contract), 83–85
testing, quality management, ventilation and humidity control
125–127 installation, 24
tests and inspections, 22
thorough compliance, safety W
management, 133 warranty, 128
three-phase control system contract, 74
follow-up phase, 123 waste disposal facilities
initial phase, 122–123 installation, 26
preliminary phase, 122 water service installation, 23
purpose of, 121 weekly meeting, 142
responsibility, 121 workers, roles and responsibility
time and material (T&M) contract, of, 132
72 working plan (site coordination
time-based cost, 91 issues), 2
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EBOOKS Construction Site Coordination and

Construction Site Coordination and Management Guide

A. SAMER EZELDIN AND

MOMENTUM PRESS, LLC, NEW YORK

Copyright © Momentum Press®, LLC, 2018.

All rights reserved. No part of this publication may be reproduced, stored

First published by Momentum Press®, LLC

ISBN-13: 978-1-94708-328-8 (print)

Momentum Press Transportation Engineering Collection

Cover and interior design by Exeter Premedia Services Private Ltd.,

Printed in the United States of America

Site Coordination and Management Guide covers key project manage-

construction communications management, construction site coordina-

4.9 Governing Law Clauses 79

Figure 1.1. Sample of a responsibilities matrix among

Table 1.1. Common site coordination issues 2

Site Coordination Overview

Coordination is an essential function in the building procedure. Recent

1.2 CAUSES LEADING TO UNSUCCESSFUL SITE

It is a typical practice for primary contractors executing projects to assign

were grouped into three classifications: staffing-related causes; technical-­

1.2.1 TYPICAL SITE COORDINATION PROBLEMS

Table 1.1. Common site coordination issues

5 Access to worksite a. Access road not yet ready

1.2.2 CAUSES OF SITE COORDINATION PROBLEMS

Sixteen essential causes leading to the common site coordination issues

Table 1.2. Causes of site coordination problems

that main contractors should focus their efforts in the manage-

1.3 IMPORTANT VERSUS TIME-CONSUMING

1. Identifying strategic activities and possible delays

1. Provision of organized tools for gathering and compiling

13. Providing own crews and subcontractors with tools, equipment,

1. Ensuring the timeliness of all work performed

7. Monitoring the functioning of each section and department within

1. Conducting regular meetings and project reviews

1. Keeping contract documents and amendments to contracts at the

9. Managing designated subcontractors or utilities undertakers

In light of the literature, it was endeavored to identify the 64 coordi-

1. Identifying strategic activities and possible delays

1. Conducting regular meetings and project reviews

1.4 DUTIES AND RESPONSIBILITIES

1.4.1 DUTIES OF A CONSTRUCTION ENGINEER

The construction engineer is in charge of the work of construction con-

• Lead the process of “authorization to proceed” for contractors

scope changes are met by forwarding appropriate documentation to

engineer and quality assurance/quality control and FCO groups

• Deliverables: Work deliverables are items considered necessary to

the project lead to address discrepancies in design packages and

 Create and submit weekly site narratives to the construction

within the budget, and meeting safety and quality requirements

 Develop plans for construction contractor’s tasks with ongoing

for integration into the project execution plan

1.4.2 DUTIES OF A CONSTRUCTION MANAGER

The meaning of the terms “project manager” and “construction manager”

1.4.2.1 General Cases on the Use of FIDIC

• Separate control of design and progress

so on, subject to the approval of the project manager representing

Under the common arrangements for this type of contracts

 Will assign the construction management specialist to manage

the contract, follow up on the design and manufacturing activ-

Kuwait has used a vastly modified form of FIDIC. In the United

employer. In Jordan, a consulting engineer is assigned by the employer to

• Employer/contractor joint venture

4.9 Governing Law Clauses 79

Figure 1.1. Sample of a responsibilities matrix among

Table 1.1. Common site coordination issues 2

1.2 CAUSES LEADING TO UNSUCCESSFUL SITE

were grouped into three classifications: staffing-related causes; technical-

1.3 IMPORTANT VERSUS TIME-CONSUMING

1.4.3 RESPONSIBILITIES MATRIX AMONG PROJECT

1.5.5 SECURITY AND PROTECTION FACILITIES

frequency (IF) strips. By utilizing this strategy, the organization could

a dvancement extend. In the remote eventuality that you are attempting to

2.5 PRODUCING AND SELECTING THE