Civil 4811 Project Management and Construction Planning Lecture 1 PDF

2023-09-19 CIVL 4811 Project Management and Construction Planning, Lecture 1 Levi Morrison, P.Eng, PMP, M.A.Sc., Director of Innovation, COVE 1 MA TER I ALS U S E D T O P RE PA RE CO U RS E (In addition to Hendrickson 2008) 2...

2023-09-19 CIVL 4811 Project Management and Construction Planning, Lecture 1 Levi Morrison, P.Eng, PMP, M.A.Sc., Director of Innovation, COVE 1 MA TER I ALS U S E D T O P RE PA RE CO U RS E (In addition to Hendrickson 2008) 2 1  2023-09-19 CIVL 4711: Construction Management Lecture 1 Contents 1 2 3 4 5 What is a project? What are the major Who are the major Value engineering What is management? What is the typical life project players in any types of construction Financing What is project cycle of a structure? construction project? within the construction Changing management? industry? What is their influence? Environment CONSTRUCTION PROJECT OTHER OVERVIEW LIFE CYCLE TYPES PLAYERS CONSIDERATIONS 3 What is a Project? PROJECT OPERATION Ongoing execution of activities following A temporary endeavor undertaken to organization’s procedures to produce the same create a unique product, service, or result result or a repetitive service. Permanent in nature. (PMBOK) (PMBOK) REPETITIVE SERVICE TEMPORARY UNIQUE INNOVATIVE PERMANENT Operations generally provide Operations are often repeated A project is unique in nature, Projects drive change. From a business Operations do not have a start and a service to the company at Projects are temporary in nature. They work, the same (or similar) sometimes a strategic objective perspective, a project is aimed at moving an end date, they are ongoing large, such as accounting, have a start and an end date tasks/scope continuously. to be obtained an organization from one state to admin, or HR. another for a specific objective 4 2  2023-09-19 PLANNED Carried out by individuals or groups EXECUTED Previous Limited by Resources Performed to achieve organization objectives or strategic plans Furniture Factory: Project Examples Building of 5000 chairs for an office client Operations Furniture Factory: 5 Large installation of permanent bleachers for CEC Operations Examples Project Ongoing purchasing of wood and fabric Hiring and training workers Cutting tools / fab equipment MONITORED CONTROLLED Next 5 Po r tf oli o v s Pr o je c t vs P ro g r am What is the difference between a program, a project, and a portfolio? PORTFOLIO Projects can be managed as a standalone project (outside a portfolio or program), within a program, or within a portfolio Program contains related projects, subsidiary programs, and program activities (which could PROGRAM include operations) Portfolio includes project, programs, subsidiary portfolios, and operations managed in a coordinated manner for strategic objectives PROJECT 6 3  2023-09-19 Project Management “The application of knowledge, skills, tools and techniques to project activities to meet project requirements.” Project Management A temporary endeavor undertaken to create a unique product or service. Definite beginning and end dates. “The activities encompassing the planning, Different in some distinguishing way organizing, staffing, executing, and from other products or services. controlling the operations of an ongoing The purpose of any project should enterprise.” be to bring about: o a change to an existing system, process, or product; or o the creation of a new system, process or product. 7 H i s to ry of Co n s tr uc t io n P r o je c t M a na g e m e nt Greek Influence Middle Ages Egypt and the Pyramids Master Builders recognized skilled stonemasons No distinction between engineering, Three distinct stages of ability Congregating workmen around specific craft = architecture, and construction recognized: Master, journeyman, trades Advent of the “Master Builder” apprentice Renaissance Industrial Revolution (Late 1700s) Advancement of construction Architecture, engineering, and construction techniques building became more distinct The 20th Century Modern Day and Moving Forward Age of the Skyscraper (Late 1800s) Construction boom after WWII Global Positioning System Technological advancement in buildings continued Demand for infrastructure Computer aided earth moving Electricity became commonplace Time, cost, quality were all huge factors systems Larger organizations forming 1935: early construction mgt programs Building information modeling 1965: Associated Schools of Construction Formed 8 4  2023-09-19 P r oj e ct Ma n a g em e nt i n Co n s t r uc ti o n What is Project Management in the Construction Industry? Management of construction requires knowledge of modern management as well as an understanding of the design and construction process. Project management differs from general management of corporations by the mission-oriented nature of the project. Once all the steps required to complete the life cycle of a facility, so too is the project management. Project management is the art of directing and coordinating human and material resources throughout the life of a project by using modern management techniques to achieve predetermined objectives of scope, cost, time, quality and participation satisfaction. 9 P r oj e ct Ma n a g em e nt i n Co n s t r uc ti o n What Makes a good Project What does Project Management in Construction Manager? Generally include? Three basic key ingredients in project Project management for construction generally include: management are: 1. Knowledge of general management Specification of project objectives and plans defining the scope, techniques. budget, schedule, performance requirements and selecting project 2. Familiarity with the special knowledge participants. of the domain related to the project. 3. Knowledge of supporting disciplines Maximizing the efficient use of resources through procurement of (ie. Computer software etc). labor, materials and equipment according to the predetermined plan and schedule. Modern technology aids with information transfer, which can be used by project Implementation of various operations through proper coordination managers. and control of planning, design, estimating, contracting and construction in the entire process. Development of effective communications and methods for resolving conflicts among the various participants. 10 5  2023-09-19 P r oj e ct Ma n a g e m e nt i n Co n s tr uc ti o n What other skills do Project Managers need? A project manager who is well educated in the fundamental principles of engineering design and management can apply these principles to a new application area. Project managers must also possess leadership qualities, strong interpersonal skills as well as strong problem solving techniques, which will improve with experience. 11 What is the point of view of different roles involved in the construction process? may set up the system to bring people in and out as General fast as possible to result in a good project at a good Sees Project as a Whole. Is price. His focus is getting to the final check. Not Contractor responsible in the end for paying that he’s not doing a great job or putting other bills. Once finished, they make people’s interests ahead of his, but his focus is a little bit different. decision of how to handle final product. Must consider upfront focus on a specific point of work or their specific capital vs operational costs scope of work. They have to get in and out, Subcontractor coordinate with other subs, work with general contractor and suppliers, then they’re out and onto their next job. OWNER design a project within a specific budget, and Architect many times they are done before the contractor starts. EXAMPLE: Concrete vs Asphalt parking lot. Concrete is more up front, minimal maintenance. Asphalt design a project within a specific budget, and many is less up front, higher Engineer times they are done before the contractor starts. maintenance. 12 6  2023-09-19 Th e P r o j ec t L if e Cy c l e What is the Project Life Cycle? The acquisition of a constructed facility usually represents a major capital investment. Many facilities are custom made and are based on consultation with the owner and any government agency having jurisdiction. The owner must have a clear understanding of the acquisition process in order to maintain firm control of quality, timelines, costs, etc., eg permits, availability of materials/equipment. The project life cycle outlines the requirements needed from the original concept to final shutdown of a project. 13 The Project Life Cycle SCOPE PLANS AND SPECS ACCEPTANCE Definition of Project Construction Plans and Specifications with which to Acceptance of Objectives and Scope Facility begin construction Constructed Facility Project Life Cycle of Market Conceptual Procurement Operation Demands or Design and Startup for Disposal of Perceived Planning + Engineering and Occupancy and Feasability Construction Maintenance Facility Needs PRELIMINARY COMPLETION OF BUILD DESIGN LIFE CYCLE Construction has Fulfillment of Useful Not detailed design completed, but is not at this stage yet accepted life of the structure 14 7  2023-09-19 The Project Life Cycle (Do not use steps in test) 15 The Project Life Cycle 16 8  2023-09-19 Pr oje ct Li fe Cy c l e E xa mp le : D e e p P a n u ke Deep Panuke Consider the example of the Panuke/Cohassett Offshore Project off the cost of Nova Scotia in the 1980’s. 17 Pr oje ct Li fe Cy c l e E xa mp le : D e e p P a n u ke Deep Panuke Market demands were favorable for developing a gas/oil project. Panuke/Deep Panuke Major oil find 1979 ($50/barrel) Panuke/Cohasset on line 1993 ($30/barrel) Panuke/Cohasset ceased production in 1999 ($20/barrel) Design began 2001($25 to $40/barrel) Production began 2013 ($110/barrel) Today ($50/barrel) Expected life 13 years (?/barrel) 18 9  2023-09-19 Pr oje ct Li fe Cy c l e E xa mp le : D e e p P a n u ke Deep Panuke Market demands were favorable for developing a gas/oil project. Conceptual planning, exploratory drilling permitting and feasibility studies (capital/operating costs versus revenue generated) indicated that it was economical. Engineering design was carried out for structural, process, electrical, etc. components Tenders for structure, equipment etc. were let, awarded and the facilities were constructed. 19 Pr oje ct Li fe Cy c l e E xa mp le : D e e p P a n u ke Deep Panuke Project start up/ first gas. Operation and maintenance over the life of the facilities. Demolition and disposal of facilities in early 2000’s. (Consideration was given to using the Panuke structure as a wellhead structure for the Deep Panuke project before demolition.) 20 10  2023-09-19 Th e P ro je c t L if e Cy c l e Project Life Cycle Stages Project Life Cycle Stages (2) Stages do not have to be sequential and Each stage of the life cycle may require different expertise (both some stages may require iteration technical and managerial). (conceptual planning/feasibility study in particular). Generally speaking all stages from conceptual planning/feasibility studies to the acceptance of a facility is referred to as the Work can de done in-house, by outside Design/Construct process while the procurement and construction consultants, or a combination of the two. are traditionally the responsibility of the construction industry. o For example the Nova Scotia Department of Transportation and How the project management is divided between the owners, Public Works have the in-house consultant and contractor will vary from project to project based on capabilities to carry out alignments, the size, complexity and location of the project. preliminary design options and costs for various alignments of highway or Life cycle costs must be considered rather than initial costs. eg a bridge structures but they would steel bridge may be cheaper to construct initially than a pre-cast contract out geotechnical work. concrete bridge but once costs associated with cleaning and repainting the bridge over it’s 75 year design life (considering inflation), the concrete bridge may be cheaper. 21 Major Construction Industry Sectors Each sector has it’s own unique challenges and construction strategies Sector 4 Sector 3 Sector 2 Industrial Examples include Sector 1 Infrastructure Steel Mills Examples include Commercial Roadways Petroleum Refineries Examples include Chemical Processing Residential Bridges Plants Office buildings Canals Examples include Large apartment Automobile Single family Dams production facilities complexes Tunnels Multi Unit Shopping malls economic activity involving Small Highways Theaters exploitation of mineral condominiums Schools works of general interest resources, transformation of raw Apartment for public or private use materials, and production of Universities complexes goods. Hospitals used for habitation used mainly for institutional and commercial purposes 22 11  2023-09-19 Ma jor T y p e s o f Co n s tru c t i o n Sector 1 Residential developer or sponsors act as the “owner” and take charge of design and construction, as well as arranging for financing and sale of the completed structures Designs are done by architects, engineers or building supply companies construction is done by contractors who hire sub-trades to do the foundation, electrical, mechanical, etc used for habitation 23 Ma jor T y p e s o f Co n s tr u c t i o n Sector 1 Residential housing market is heavily affected by general economic conditions, tax laws and the government. Very competitive, as many hobbyists will attempt this type of construction Over demand of sub-trades can cause longer waiting times and increased costs When market booms, increase in both production of new buildings and renovation of old ones, lessening supply used for habitation 24 12  2023-09-19 Ma jor T y p e s o f Co ns tr u c t i o n Sector 2 Commercial The owners of these buildings may not be familiar with industry practices so they sometimes hire professional consultants to arrange for the financing architects/engineers toversee the design Contractors handle the construction used mainly for institutional and commercial purposes 25 Ma jor Ty p e s of C on s tr u c t i o n Sector 2 Commercial Due to the greater sophistication of these types of facilities, and financial requirements the market is shared by fewer competitors With this in mind an owner must be careful that one or two Engineers or Contractors do not have a monopoly on this work thus reducing the cost effectiveness of bidding for the work Picture: Halifax Regional Library used mainly for institutional and commercial purposes 26 13  2023-09-19 Focus on features for users and stakeholders INTERNAL Specify dates and deliverables, and their strategic U importance. EXTERNAL Focus on themes and critical features, and general b release dates. 27 Ma jor T y p e s o f Co ns tr u c t i o n Sector 3 Infrastructure / Heavy Construction Construction primarily involves distribution of goods and people Most of these projects are publicly owned. The engineers and builders are highly specialized. Many civil engineers Picture: Macdonald Bridge, the Big Lift works of general interest for public or private use 28 14  2023-09-19 Ma jor T y p e s o f Co ns tr u c t i o n Sector 4 Specialized Industrial This usually involves very large-scale projects with a high degree of technical complexity such as oil refineries, steel mills, material handling facilities, nuclear plants, etc. The owners are usually deeply involved in many aspects of a project and prefer to work with a team of designers and builders who have they have developed good working relationships with over the years. Picture: Irving Shipyard economic activity involving exploitation of mineral resources, transformation of raw materials, and production of goods. 29 Ma jor T y p e s o f Co ns tr u c t i o n Sector 4 Specialized Industrial Long range demand forecasting is the most important factor for these projects as they are expensive and require a considerable amount of planning and construction time. Government regulation also plays a major role on these projects. Picture: Tufts Cove Generating Station economic activity involving exploitation of mineral resources, transformation of raw materials, and production of goods. 30 15  2023-09-19 Who i s In vo lv e d in a Co n s tr u ct i o n Pr o je c t? What denotes who will be involved? The type of services required depends to a large degree on: 1. The type of construction. 2. The experience of the owner in dealing with various past projects. There are many different “players” in the field of construction, each with a meaningful contribution All add value, but also complexity 31 P r oje c t Pa r ti ci p a nts “Players” by level of influence over project outcome Primary Players Secondary Players Secondary Players Secondary Players First Level Players 2nd Level Players 3rd Level Players Always involved with the planning, budgeting, This layer influences alignment, contracts and outcome of job in a serious Parties have no contractual Parties do not have a direct relationships throughout way, but are typically connection or obligation to any link to the primary players, project connected to primary of the primary players, but hold but do influence construction players through a great influence over the project projects on a regular basis. subcontract or purchase Often, they create a whole order agreement. Not under industry effect which trickles immediate control of owner, down to project subcontracted. 32 16  2023-09-19 Le ve ls o f I n flu e nc e Influence levels from Wiley 2020 Project Owner Service Strategy 33 Primary Players Each sector has it’s own unique challenges and construction strategies Primary Players Construction Professionals Architect Engineer Job titles include (but are Owner not limited to): Licensed project manager professionals trained general superintendent Usually lead in the art of science project executive designers for heavy and building design. operations manager Generally two types civil and industrial construction manager of owners: Public projects CEO owners and private owners 34 17  2023-09-19 Pr ima r y P la y er s: Ow ne r Primary Players Owner After determining need and deciding to build, accountable for four primary duties: 1. Developing the PROGRAM and outlining the needs and requirements of end users 2. Determining the quantity, extent, and character of the project by defining the work scope 3. Creating the high level budget of the project, including land acquisition, development, design and construction costs 4. Providing funding for the project and making payments as necessary 35 Primary Players: Design Professionals Construction manager works with both architect and engineer on a regular basis through construction process Primary Players Design Professionals (Architect AND Engineer) Design Professionals have a responsibility to the project and the owner. They generally provide the following services: 1. Assisting the owner in developing the facility program, and determining end user needs/requirements 2. Advising the owner regarding image and charter of facility and establishing broad design goals 3. Assisting the owner in selecting products to fit program and the budget 4. Advising the owner on special and esthetic issues and generating graphics solutions to help visualize the problem 5. Developing the final building plans, construction details, and specifications 36 18  2023-09-19 Primary Players: Design Professionals Construction manager works with both architect and engineer on a regular basis through construction process Primary Players Engineer Architect Responsibility on projects is varied depending on Responsibility is to translate and develop owner’s discipline, but in all cases they must understand requirements and represent them (generally owner’s requirements for budget, operations, graphically) so that the contractor can accurately durability, and intended use of space. Most price, schedule and implement the design. common disciplines of engineering found in construction are: Architect firms often include the following, but often subcontract: 1. Structural Engineers 1. Drafters/CAD/BIM operators 2. Mechanical Engineers 2. Specification Writers 3. Electrical engineers 3. Interior designers 4. Civil Engineers 4. Landscape architects 5. Surveyors 37 Primary Players: Design Professionals Primary Design Professionals (the A/E Firm) Players Traditionally the owner usually engages the architectural and engineering (A/E) firm or consortium as a technical consultant to develop a preliminary design. After the preliminary engineering design and financing arrangements are completed, the owner will enter into a construction contract with a general contractor either through competitive bidding or negotiation. The general contractor will act as the constructor and/or coordinate subcontractors to complete the project. 38 19  2023-09-19 Primary Players: Design Professionals Primary Players Design Professionals (the A/E Firm) The A/E firm completes the final design and may also provide site supervision during construction. A/E firm use is most common method used for building construction. This traditional approach has its drawbacks because the A/E firms have become more isolated from the construction process. This is due to reduced fees to A/E firms, legal implications, and lack of knowledge of new construction techniques. Due to the reduced lack of involvement in the construction, some A/E firms in larger cities may be more interested in “protecting themselves” instead of working with the owner and contractor. Fortunately this is not the case in Nova Scotia. A method of reducing construction costs is to introduce the concept of value engineering, which basically is soliciting a second design that may be cheaper than the original design. 39 Primary Players: Construction Professionals Primary Players Construction Professionals The term “Constructor” is generally used to define professionals responsible for all construction activities, which can be quite broad. Often, this is the General Contractor. Their responsibility is to: 1. Interpret the plans and specifications and prepare cost estimates and time schedules to meet the requirements of the owner 2. Determine and implement the best construction practices, means, and methods to satisfy the owners requirements 3. Oversee and manage all of the construction operations into a single, safe coordinated effort 40 20  2023-09-19 Primary Players: Construction Professionals Primary Players Construction Professionals Construction professionals can generally be separated into four primary subcategories: 1. General Contractors – the “prime contractor, and enter the contract with the owner to deliver project in accordance with the plans and specifications. 2. Construction Managers - May be employed by construction management firms, GCs, architects, engineers, owners or specialty contractors 3. Building Trades – without the trades, there is no construction at all. These are the people who conduct the work and include Plumbers, Electricians, ironworkers etc. Often, very high demand during housing boom. 4. Specialty Contractors – Often referred to as “subcontractors” because they perform their work under a contract with another contractor (typically the GC) to do a portion of the contractor’s work. There can often be several layers of subcontracting. They do not have as much influence on the project as the GCs 41 Primary Players: Design/Construct Primary Players Design Professionals (Design/Construct Firm) This is a firm that integrates design and construction management in a single organization. In these firms, conflicts between designers and constructors can be avoided as the best constructability option for that company can be used. From an owners point of view it must be insured that the quality of the constructed facility is not sacrificed by the desire to reduce time or cost for completing the project. It can be difficult to make use of competitive bidding thus the owner must be relatively sophisticated in negotiating realistic and cost-effective contracts. Although advantageous to the owner, because an all inclusive packaged is offered at a fixed price, it is a lot of risk associated with the design build groups as they must do enough design and cost estimating to prepare a competitive bid, but if they are not successful they are not paid for their time. 42 21  2023-09-19 Primary Players: Design/Construct Primary Players Design Professionals (Design/Construct Firm) - ADVANTAGES The advantages of this type of system are: Phased construction can be used to reduce time. A turnkey approach can be used to delegate all responsibility to the design/construct firm. In Nova Scotia there are very few if any of these types of firms, however design build projects are common. For these projects design/construct alliances are formed between different companies and these groups bid against other groups. 43 Secondary Players First Level 2nd Players 1st LVL Construction Professionals – The Trades Mainland Nova Scotia Building Trades lists 13 primary professions 1. Boilermakers – build, erect, repair, test and maintain boilers 2. Bricklayers – build, maintain, repair walls, floors, pavings and other structures that involve brick, natural stone, manufactured stone, masonry panels, glass and concreate blocks etc. 3. Carpenters – Make, renovate, and repair structures using materials such as wood, steel, and concrete 4. Electrician – Install, repair, and maintain electrical systems 5. Elevator Constructor or Mechanic – Assemble, install, maintain and repair freight and passenger elevators, escalators, moving walkways etc. 6. Heat and Frost Insulator 7. Ironworker – Generalist, Structural/Ornamental, and reinforcing. 8. Labourer - assist skilled tradespersons and perform tasks 9. Millwright - installs, maintains and repairs stationary industrial machinery and mechanical equipment 10.Painter - apply finishes in residential, commercial, institutional, and industrial construction projects 11.Plumber / Pipefitter - fabrication, installation and servicing of piping systems 12.Roofer - install, repair and replace roofs 13.Sheet metal worker - design, layout, measure, fabricate, assemble, or repair sheet metal products. 44 22  2023-09-19 Secondary Players First Level 2nd Players Vendors and Suppliers 1st LVL Vendors and Suppliers (material) (Equipment) A project may have talented designers, Depending on the project, equipment can play a very big innovative constructors, and wealthy, role in construction. Highway jobs, large excavations, sophisticated owners, but without materials to bridges, tunnels, and tall buildings all rely heavily on the build with, the project would be only a dream. use of equipment to carry out the work. Six primary categories are: Materials and building components are manufactured, fabricated, and installed by 1. Earthmoving excavators, loaders, and trenching suppliers. machines 2. Lifting - cranes, aerial lifts, and boom trucks A user’s choice of materials is based in part on 3. Light equipment - breakers, saws, generators, performance, durability, and aesthetic appeal. pumps, and compressors But without the help of suppliers and their trade 4. Bituminous machinery - cold planers, asphalt associations, architects and engineers would be pavers, rollers, and soil stabilizers daunted by which materials to specify and 5. Concrete and aggregate - crushers, screens, constructors by which methods of material feeders, conveyers, rock drills, mixers, and pavers assembly to use. 6. Components and attachments - buckets, blades, demolition tools 45 Secondary Players 2nd Level 2nd Players 2nd LVL Insurance Companies Building Inspectors Utility Companies Many factors dictate the type of Construction inspectors inspect Electricity, gas, water, sewage, construction insurance coverage one the construction and communications services would need for a given project or maintenance of new and existing business. These factors include, the buildings, bridges, highways, and person’s relationship to the project industrial construction to make (contractor, property owner, sure that specifications and subcontractor, etc.), the type of entity building codes are met and buying the insurance (business or monitor work site safety. individual), and the type of property to be covered. These include: 1. Builders Risk Insurance 2. Commercial and Contractor General Liability Insurance 3. Errors and Omissions Insurance / Professional liability Insurance 46 23  2023-09-19 Secondary Players 3rd Level 2nd Players 3rd LVL Financial Institutions Government There are several government agencies, which issue Investment in a constructed facility represents a cost in regulations that can effect the construction process. the short term that returns benefits only over the long term use of the facility. Thus, costs occur earlier than the Codes place minimums on design and benefits, and owners of facilities must obtain the capital construction procedures. resources to finance the costs of construction. A project cannot proceed without adequate financing, and the cost Bylaws can affect work schedules and limit of providing adequate financing can be quite large. design. Occupational Health and Safety places requirements on workers’ safety Environmental Agencies require various permits. 47 Financing Who provides the capital? Construction Financing: Who else is Construction Financing: Breakdown involved? A major project requires an enormous amount of capital that is often supplied by lenders who Accounting firms may be required to evaluate want to be assured that the project will offer a the economic and financial feasibility of the fair return on their investment. constructed facility, particularly with respect The direct costs for a project can be broken to provisions of government laws. down as: Construction costs to the contractor (60% to Investment banks may also be consulted on 80% of total). various options for financing the facility for Expenses for land acquisition, legal fees, A/E the long term. (In the 1970’s the HHB decided fees, interest on construction loans, lost to convert their debt into foreign currency revenue until building completely rented, etc which backfired resulting in a greater debt.) (20% to 40% of total). 48 24  2023-09-19 Financing Who provides the capital? Construction Financing Overview: Continued Upon completion of the facility, construction loans will be terminated and the post-construction facility financing will be arranged by the owner. For residential homes it is in the form of a mortgage, for institutional and commercial buildings via commercial banks, for industrial buildings from general corporate funds and for infrastructure construction from taxes. During the construction of the project, a payment request along with a standard progress report will be submitted by the contractor to the owner. Provided that the work was completed satisfactorily, the requested amount minus a holdback portion will be released. A portion of holdback amount will be paid following substantial performance of the work (project is completed for it’s intended function), once sufficient time and documentation has been submitted to ensure that the contractor has no claims or liens against the completed work. The remaining holdback amount will be paid after total performance of the work is completed once sufficient time and documentation has been submitted. Beware of contractor bids that are “top heavy”. eg. Cost to deliver piles $100/m while cost to install piles are $1/m. 49 Financing Who provides the Capital? Facility Financing Many private corporations maintain funds that can be used for facility financing (operating costs) Public agencies obtain their long term funding from tax commitments and government budgets. Bonds can also be used to obtain lower interest rates as well as creative lending schemes. For international projects, the currency used for financing agreements becomes important. 50 25  2023-09-19 Legal and Regulatory Requirements Legal / Regulatory Owners want legal protection for all the activities involved in the construction. Construction activities involve both physical and financial risk, which the owner tries to shift to other parties via contractual agreements. This can cause the other parties to increase their price, or end up in non- performance or bankruptcy. To avoid this, all risks must be clearly defined and accepted by all involved before the project starts. 51 Architectural and Engineering Firms: Value Engineering Value Engineering from A/E Value engineering usually results from the successful contractor taking advantage of construction techniques that they are familiar with instead of the proposed techniques. eg. For the Macdonald Bridge Third Lane Project (1999) , the existing trusses were strengthened with high strength steel bars instead of structural steel elements as originally designed by the consultant. The associated cost savings are usually shared between the owner and the client. 52 26  2023-09-19 Selection of Professional Services Architectural and Engineering Firms The re-design costs during value engineering are the responsibility of the contractor and can be done by the original A/E firm or by an independent A/E firm. 53 An Industry in Transition Technology Changing Environment: Design Technology Recent technology has allowed designers to reduce the time it takes to explore alternate designs. Architects, Engineers and Constructors can now develop three-dimensional Building Information Models (BIM) Architecture firms are beginning to incorporate virtual technology for building review Buildings are becoming “Smart” during construction, which use computers to control light, humidity, sound etc. 54 27  2023-09-19 An Industry in Transition Globalization Changing Environment: Globalization With the increase of online communications and the accessibility of global travel, more firms are pursuing international opportunities Annual revenues expected to reach over 15 Trillion USD by 2030 According to PwC (Price Waterhouse and Coopers), USA, India and China will account for 57% of global construction growth in next decade Engineering News Record (ENR) publishes top 250 international construction firms (by their revenue EXCLUDING within their own country) 55 Most firms out of the ENR top 250 (2019) United States 35 international firms out of top 250 China 74 international firms out of top 250 Western Europe 45 international firms out of top 250 Turkey 44 international firms out of the top 250 56 28  2023-09-19 An Industry in Transition Management Systems in the A/E DESIGN world (For Construction Management, Waterfall is almost always used) Waterfall WATERFALL AGILE Agile Discrete, terminal phases Collaborative Thorough Documentation Self Organizing One phase generally before the Cross functional other begins Simultaneous, incremental work Adaptability Management Systems Specific type of Agile Methodology Specific Type of Agile Methodology Attempts to complete major increments in 2 Focus is on process improvement week sprints Fast bottleneck identification Kanban is more about process improvements, SCRUM is about getting work done faster AGILE AGILE Kanban SCRUM 57 An Industry in Transition Project Delivery Systems: Lean Construction Problem Solving Continuous improvement 01 and learning People and Partner Respect, Challenge, and Grow them 02 Process Eliminate Waste 03 Philosophy Long Term Thinking 04 Lean Construction: Goal is to maximize value and minimize waste Materials arrive when needed. Emphasis on work flow. Materials arrive on side when needed. Creates system of continuous work for contractors without lag. 58 29  2023-09-19 An Industry in Transition Project Contract Systems: Bridging Design/bid/build (no bridging) Schematic Design Construction Award Design Development Documents Construction Construction Contract Design/build (with bridging) Schematic Bridging Contract 1st Step award: Construction 2nd step award Construction Design Documents Design Build Documents 59 05 Energy and Atmosphere LEED Goal is to reduce overall 01 Innovation / Design Leadership in Energy and Environmental Design operational consumption Achieve significant, measurable environmental performance using a strategy 06 Materials and Resources not addressed in the LEED Indoor Materials & green building rating system Environmental Resources Encourages selection of Quality sustainable grown, harvested, 02 Sustainable Energy & produced and transported Atmosphere products Sites Encourages a project's natural environment to be 07 Location /Transportation valued and respected throughout every step of the Encourages building using building process Water existing infrastructure Efficiency 03 Water Efficiency Location & 08 Regional Priority Goal is to reduce overall Transportion consumption inside the encourage project teams constructed facility and to focus on their local out environmental priorities 04 Indoor Env. Quality Sustainable 09 Integrative Process Sites Regional Priority Encourages Project team Encourage prioritizing air quality, lighting, thermal Innovation members look for synergies conditions, ergonomics Integrative among systems and Process components 60 30  2023-09-19 CIVL 4811 Project Management and Construction Planning, Lecture 1 Levi Morrison, P.Eng, PMP, M.A.Sc. Director of Innovation, COVE 61 31