The Managerial Aspects Of Construction Contracting
Construction is the second largest industry in the United States with well over six million employees. Considering the scope of this workforce, management is crucial. Construction management and contracting is no simple task—especially when large projects are at hand. Depending on the size of the project, thousands of people may be involved. This requires skilled professionals to properly manage items and people in order to meet budget and time constraints.
The United States construction industry consists of four sectors:
- Residential: apartments, homes, etc.
- Commercial: shopping centers, warehouses, etc.
- Industrial: power plants, refineries, etc.
- Heavy Construction: infrastructure, bridges, etc.
Within each of these sectors, management pays a key role in maintaining fluid communication and organization within construction projects. In the past, construction workers who worked their way up the ranks, often without a degree in the field, generally held management positions. Nowadays, it is most common to have a bachelors or masters degree when holding a construction management role. Modern models of construction have also developed throughout the past couple of decades. Four main models of construction are as follows.
General Contractor (GC)
This is the most widespread model of construction where an owner will contract a GC who takes over and provides the labor force. The GC will hire subcontractors and at the end of the day takes all responsibility for the project and deadlines.
Construction Manager (CM)
This model has become more popular in the past ten years. The owner will hire a number of prime subcontractors to handle the various tasks of a construction project. The owner will hire a CM to manage the subcontractors and designer. In this model, the CM isn’t held financially responsible for the project since his role is to manage the previously hired subcontractors.
This is a model where the owner hires a firm to take care of the entire project. Nicknamed ‘Turn Key Construction,’ this model allows for the owner to just turn the key upon completion. This model can allow for projects to be complete very quickly and sometimes consists of joint ventures between firms.
Owner Managed Construction
This model is where the owner has his or her own crew to take care of construction. The crew does repairs to the project down the road and the owner takes full financial responsibility of the project.
The Evolution of a Project
All construction projects begin with a basic idea, which is communicated to architects and engineers. It is up to these professionals to turn a concept into a design. Once a design is finalized, the project owner then delivers it to a general contractor or builder. Contractors will offer the project owner a bid or estimate for the total cost of the project. The proposal includes pricing for materials, specialized labor, the contractor’s office costs, and a profit margin. This information is then finalized in a signed contract.
This is where construction managers enter the picture.
Because of their heavy involvement in nearly every aspect of the project, managers are responsible for numerous tasks. For starters, they must review documents specific to the project—including the initial construction proposal. This must be done prior to any construction, as it will determine what needs to be done before beginning the project. An in-depth analysis is necessary to get an understanding of what will be needed before and during the project.
Once the construction manager reviews the project, they should help procure the land for the site. At this point, managers should know exactly what is needed for the site—that’s why it’s essential for them to be involved in the acquisition process. Construction managers are also involved in obtaining the necessary permits to begin the project.
Once site selection is finalized, managers are responsible for interviewing workers and specialized tradesmen. It is up to the manager to hire, discipline and fire individuals as they see fit. Managers are responsible for these workers—and any problems that may arise during construction. This requires managers to routinely visit the site.
Managers are also responsible for ordering and maintaining supplies and special items needed for the project. Because they are in charge of maintaining the project’s budget, it is up to managers to shop around for affordable, yet reliable materials. Materials range from small tools to large construction vehicles. It may be necessary to provide a trailer to be used as a construction office and temporary utilities, including electricity, trash receptacles such as dumpsters, and restroom facilities such as portable toilets. Additionally, it may be necessary to have the site surrounded by a temporary fence to ensure security.
Ensuring Efficiency & Project Completion
One of the largest responsibilities of any construction manager is maintaining an effective and efficient construction schedule. They are required to keep track of scheduling, as delays with subcontractors can severely impact the amount time needed to complete a project. Contracts include deadlines, which are often tied into the amount of money that the general contractor receives. The general contractor must keep accurate records of cash flows, expenses, and other financial matters.It is up to the construction manager to supervise the project and determine that the project is being executed according to plan, including:
• Periodically inspecting the project to ensure compliance with safety and building code regulations.
• Reviewing the project on a daily basis to ensure efficiency.
• Redirecting the project, should there be any deviations from the original plan.
Ultimately, it is a construction manager who ensures project completion.
Many managers start out working in construction, including framing, concrete work, and plumbing. They may discover over time that they have the organizational and management skills to work as a general contractor or manager. Over time, they may do little of the actual construction themselves, but must have a strong background in this discipline to be able to catch or prevent problems. Core management skills such as communication and teamwork are used on a daily basis.
Obviously project management talent is crucial, as well as the ability to make substantial financial decisions. Thee individuals must have the capacity to see the ‘big picture’ and how all of the pieces will (or should) work together. It is imperative that they assemble a team of workers and subcontractors that are the best ones available for the job. Using a cheap product or material—even labor—may not make sense in the long run, especially when used in building something that is expected to last for decades.
Managers must also take into consideration the desires of the client, especially if they are building someone’s personal residence. Using incorrect materials or inexpensive labor could prove costly if that part of the project has to be ultimately redone. Often, the cost of materials or labor directly corresponds with their quality. You get what you pay for.
Managers must be able to think critically and solve problems on a daily basis and be able to delegate responsibility. They must be good at dealing with all different types of people and solving issues that may crop up between them. Creating solutions to problems—especially when everyone is on a deadline and has more than one project to complete—can be the difference between effortless execution and disaster. The best managers will have the ability to produce a quality end product within the specified time frame and budget.