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Another Brick in the Wall Understanding Construction Management By: John Knox, Vice President The Chamberlain Companies.

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Presentation on theme: "Another Brick in the Wall Understanding Construction Management By: John Knox, Vice President The Chamberlain Companies."— Presentation transcript:


2 Another Brick in the Wall Understanding Construction Management By: John Knox, Vice President The Chamberlain Companies

3 Presentation Process Explain the differences Discuss how these differences affect clients Examine the benefits/challenges of Construction Management 15-20 minutes for question/answer period at end of presentation

4 Construction Management Construction Management is a concept which integrates the design and construction processes. It joins the Owner, Architect, and Builder into a team to produce a facility which best meets the functional requirements and aesthetic needs of the Owner within the authorized budget and occupancy schedule.

5 Construction Management (CM) Not Project Management A contractual agreement for the construction of a project Unlike General Contracting and Design/Build, CM is an open book method GCs profit and overhead are included in his stipulated sum price Construction Manager paid a negotiated fixed fee or percentage of construction cost Team Approach - CM hired early in the process to develop schedule and cost estimates, and provide input during design process

6 Stipulated Sum vs. Open Book Stipulated Sum –Lump sum amount quoted for the construction of a project –Examples are General Contracting and Design/Build Open Book –All construction costs are disclosed openly to the Owner –Transparent process with Owner actively involved in award of contracts

7 Construction Divisions Div. 1 – General Requirements (Site Super, Labour, Fencing, Insurance, etc.) Div. 2 – Site Work Div. 3 – Concrete Div, 4 – Masonry Div. 5 – Structural Steel Div. 6 – Wood & Plastics Div. 7 – Thermal & Moisture Protection Div. 8 – Doors & Windows Div. 9 – Finishes Div. 10 – Specialties Div. 11 – Equipment Div. 12 – Furnishings Div. 13 – Special Construction Div. 14 – Conveying Systems Div. 15 – Mechanical Div. 16 - Electrical

8 So, While there is no difference in Construction Means and Methods The difference lies in.. PhilosophyPhilosophy ContractContract ControlControl

9 Philosophy - CM A portion of his fee is for pre-construction services during the design phase Questions architectural decisions along the way with the focus on value The Construction Manager – Advisor during design stage and the Owners Representative during the construction stage Less chance of dispute with Owner or Architect as CM involved in design process, and does not profit from omissions or changes

10 Philosophy - GC Design – Bid – Build Process. GC not involved until design process completed His only responsibility is to build what was tendered GC will price and produce exactly what is shown on drawings. Grey areas, omissions, or changes are all opportunities for profit Relationship between Owner, Architect, and GC can become confrontational when problems occur

11 General Contracting Control of the Site ContractControl Working drawings and specifications completed and all divisions tendered as one package to General Contractors Contract between Owner and General Contractor General Contractor has contracts with each of the Trade Contractors GCs Site Super manages Site and Trade Contractors

12 Construction Management Control of the Site ContractControl Divisions divided into tender packages, drawings & specifications for each package completed, and tendered individually and sequentially Owner contracts directly with Trade Contractors CMs Site Super manages Site and Trade Contractors

13 Construction Management by Architect ContractControl Chamberlain regularly performs both roles – Architect and Construction Manager

14 Greatest Risks on a Construction Project are … Unknown conditions Facility not meeting expectations Bankruptcy of Constructor Exceeding the budget or schedule Inclement weather

15 Client Concerns Risk Exposure –Control over Site, Costs, and Schedule Flexibility –Deal with unexpected situations –Ability to make changes without paying a premium Image Value Cooperative Team Relationship

16 Risk is Minimized by Maximizing Control and Flexibility during the Construction Process

17 Control Owner contracts and is dealing directly with the Trade Contractors He who pays the piper calls the tune

18 Flexibility Possible to start construction before design finalized –Owner has a longer time to determine specific requirements because packages sequentially tendered –Good for fast tracking a project Establishes project cost early Owner doesnt pay a premium for changes Allows for continued operation during construction Allows for incorporation of donated materials/labour Allows for inclusion of local trades/suppliers

19 Reality of Stipulated Sum Contracts Price is indicative of the opportunity at that moment in time Price only fixed if absolutely nothing changes during construction Generally, the GC is forced to use lowest trade/supplier prices to get the job 100% price driven

20 The Bottom Line The price shown on a Stipulated Sum Contract is the least you are going to pay for your building not the most.

21 DivSub TradesGC #1GC #2GC #3Lowest CM 1GENERAL132,318133,400132,600132,318 2SITE WORK306,334272,585304,384272,585 3CONCRETE37,50842,77526,594 4MASONRY44,26142,00041,099 5METALS72,52277,049107,09972,522 6WOOD & PLASTICS47,01542,24453,68142,244 7THERMAL/MOISTURE56,76864,79868,18656,768 8DOORS/WINDOWS88,27588,90585,462 9FINISHES141,916135,016133,974 10SPECIALITIES27,50828,68236,41127,508 14CONVEYING28,26127,53529,27427,535 15MECHANICAL176,606215,959188,847176,606 16ELECTRICAL173,394177,699180,811173,394 TOTAL:1,332,6861,348,6471,388,4221,268,609 Value

22 Savings Accrue to Owner ItemBudgetTenderSavings Site Work$300,000$276,000$24,000 Donated Material$5,000 Deleted Doors$2,000

23 Challenges of Construction Management Owner more involved in construction process More paperwork – construction draws to be approved under guidance of Construction Manager Upside – complete paper trail for all monies spent on the project and an excellent opportunity to learn about the design and construction process

24 Projects built under Construction Management Canadian Warplane Heritage Museum Air Traffic Control Tower, Toronto Pearson Intl Airport

25 Lincoln Public Library, Rittenhouse Branch Shelburne Public Library Addition & Restoration

26 Niagara-on-the-Lake Public Library

27 Quinte West City Hall/ Public Library

28 Other Projects

29 To Re-cap… General ContractingConstruction Management Design InvolvementNoneInvolved early in planning & budgeting Building Team StructurePrime ContractorAdvisor/Agent to Owner Accounting DisclosureNoneOpen Book PaperworkLessMore Risk Exposure if Contractor(s) go broke HighVery Low Relationship with OwnerMinimal interaction with Owner. Works through Architect Works closely with Owner Site ControlNoneFull Flexibility to Make Changes Extra cost at full premium Actual cost Savings RealizedGo to GCGo to Owner

30 Wrap Up… Able to fast track, if necessary Early establishment of project costs Cooperative relationship – less stressful for Owner Provides Owner with more Control and Flexibility during construction Realizes best Value for Owner

31 Another Brick in the Wall Understanding Construction Management By: John Knox, Vice President The Chamberlain Companies

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