Construction Management Review

OHSA guarantees 3 main things:

-the right to know, participate, and refuse unsafe work
Whmis:
-brought through labes, MSDS, Worker education
-Symbols for:
-compressed gas, corrosive, flammable, toxic, biohazards, corrosive, rea
ctive.
Supplier label requirements:
-official languages, reference to MSDS, Hazard symbols, first aid measures
MSDS should contain, in order
-health hazard data
-first aid
-ingredients/exposure limits
-fire and explosion data
-reactivity data
-spill/cleanup/disposal procedures
-storage/handling
-preventative measures
Main routes of entry:
-ingestion, absorption, inhalation, injection
Accident Costs:
-Human: person injury, pain and suffering, diminished lifestyle
-Economic: Lost production, accident investigation time, retraining cost
s
-for every $1 spend in safety up to $6.15 in return
-Penalty for non-compliance is $25,000 fine or 12 month imprisonment for individ
uals
-$500,000 fine for corporation
-it is possible to have multiple convictions for a single accident
Procurement Options: Different ways the owner can assemble his construction team
:
-Design Bid Build
-Fast Track:
-construction management
-Design build
-P3 (public Private partnership
-Alliancing
-construction is complicated and the team can change often
Partnering Charter:
-Contains all the goals and objectives of a group, and must be signed by all par
ties
-Contains a dispute escalation ladder
The Occupational Health & Safety Act is the minimum standard, includes the right
of workers, offenses and fines, and the concept of due diligence.
Internal Responsibility System: The principle that workplace hazards can be deal
t with through communication and cooperation between employers and workers.
-Workplace parties share the responsibility for OHS
Employer's Duties:

-Provide and maintain Safety equipment

-comply with prescribed requirements
-appoint competent persons as supervisors
-inform and train employees
-take reasonable precaution to ensure the safety of workers
A competent person is qualified due to knowledge, training, and experience to wo
rk and dangers
Supervisors Duties:
-Ensure that worker works in compliance with OHSA and regulations
-PPE is being used
-Take reasonable precaution in the circumstances to protect the worker
Workers Duties:
-Comply with OHSA
-report violations, hazards, and accidents.
Workers have the right to refuse work that is unsafe, and know about any hazards
they may be subject to
Ministry of Labour enforces shit
Fall Prevention Systems:
-Guardrail systems
-Travel restraints: Travel just far enough to reach edge, but not fall o
ver
-Fall arrest: protects you after you fall (2ft)
-Warning barriers and bump lines
-Protective coverings
Types of Engineered Shoring Systems
-Soldier Piles and lagging: Uses vertical steel pipes with horizontal la
gging to retain soil
-Caisson walls: Composed of a series of vertically drilled holes that ar
e interlocked. Better method as opposed to soldier piles and lagging.
-interlocking pipe walls: Pipes driven into the ground to provide watert
ight system
-soil nailing/shotcrete: Concrete shot through a hose
-underpinning: Strengthening the foundation of an existing building (can
be by jet grouting or micropiles.
-micropiles are small diameter holes drilled with low headroom equipment
filled with grout and steel bar.
-sheet piling: interlocking sheets of steel driven into the ground
Drawings and Specifications
-The purpose is to convey all the info required to allow the structure to be con
structed in the manner it was envisioned and designed. Graphical representation
of work
-Created with standardized conventions for layout, nomenclature, interpretation,
dimensions, scale, etc.
-Hierarchy are used to outline which diagrams should take precedence over others
.
Standard Construction Document:
-Agreement between the owner and contractor
-Specifications:
-Front end: definitions, supplementary conditions, instructions to bidde
rs

-Technical Specifications: trade/material specifications, Schedules

-Drawings
-Large scale vs small scale diagrams
-dimensions shown vs scaled
3 Key Drawing Types
1. Design drawings: Issued by the consultants for tender and constructio
n and revised to reflect clarifications and owner initiated changes during const
ruction
2. Shop Drawings: Details for fabrication and construction issued by the
contractor/suppliers/sub-trades with info for construction work
3. As-Built drawings (record drawings): Revised during construction to r
eflect the work done
Design Drawings by discipline:
A- Architectural
C- Civil and Site Servicing
L- Landscape
S- Structural
SH- Shoring
M- Mechanical Building Services
E- Electrical services
Types of Design Drawings:
-site plan and grading plan
-floor and foundation plan (buildings)
-plan and profile (infrastructure)
-staging
-sections and elevations
-details
-general notes
Common Terminology:
Elevation: A view that shows true width and height of object
Interior elevation: a view of the inside of the room/building
schematic: a simplified drawing used to convey service connection details/operat
ion controls
section drawing: drawing that cuts through construction to show vertical orienta
tion/detail
detail drawing: an enlarged drawing to show information necessary to construct/a
ssemble a part
Civil plan: aerial or birds eye view
Look at 4.2 for common symbols pg 13-17
Line Types:
Visible lines: thick, continuous lines that represent feature that can be seen i
n the current view
Hidden lines; dashed, thick lines that show features thatcannot be seen in the c
urrent view
Center lines; chain, thin lines that show symmetry
Dimension and extension lines: continuous, thin lines that show size and locatio
n of features on drawings
Shop Drawings:
-Responsibility of the contractor and subcontractors and suppliers once the proj
ect is awarded
-Provides details for contractor proposed fabrication, manufacturing and constru
ction of work
-must be reviewed by architect or engineer for conformance with project specific

ations
Architectural Drawings:
-Floor plans
-ceiling plans
-elevations
-sections and details
-schedules
MasterFormat
-Developed by Construction Specification Institute (CSI) and Construction Specif
ications Canada (CSC)
-Master list of titles and numbers for organizing construction requirements, pro
ducts, and activities
-Used on the majority of commercial and institutional building projects in North
America
-4 Levels of Structure
-level 1: Divisions
-level 2: broad scope
-level 3: medium scope of work
-level 4: detailed scope of work
construction:
-If the ground is hard rock only anchors are needed
-If the ground is soft a mat foundation can be used to distribute the building w
eight
Cranes:
Tower Crane
-Inside footprint of structure
-Outside footprint of structure, very close to building envelope
Freestanding/Mobile crane:
-well outside footprint of structure
Types of cranes:
-Luffing Crane
-Tower
-Clock and hook
-counter jib
-jib and trolley
-Formwork is used to mould concrete (can be one sided or two sided)
Cladding- Building Science
-Units must be enclosed with exterior walls and roof before starting interior fi
nishes
-insulation
-moisture/air barriers
-exterior finishes- cladding, fenestrations (doors/windows)
Interior finishing
-Drywall, taping, priming and painting
-kitchens and bathroom fixtures and millwork, counters, tile
-light fixtures, all electronic controls
-flooring
Inspection:
-Check for building code compliance
-check for specification compliance
-fire and life safety

Financial or performance failure

-12% of all buisness failures are contractors
-causes
-incompetence
-lack of managerial/unbalanced/construction experience
-neglect/fraud/disaster
Contractor unable to complete projects due to:
-Insufficient working capital (not paying suppliers/subs and eventually bankrupt
)
-over expansion (growing too fast)
-insufficient human resources
-poor choice of projects
-not getting paid
-subcontractor goes bankrupt
-phantom profits (not understanding of costs)
Bidders Lists:
-Limiting the bidders to qualified contractors can substantially reduce the odds
of hiring a contractor that might fail
Qualifying bidders to reduce risk:
When:
-Prequalification:
-Takes place before bidding (most common)
-Limits number of contractors that can bid
-Prequalification notice is published, contractors submit inform
ation that is evaluated and notified. Bids accepted from qualified bidders only,
and lowest bid choosen
-Postqualification:
-any contractor can bid
-the qualifications of only the lowest bidders are examined
-Contractors submit tender with their qualifications. Owner rev
iews bids, qualifications of lowest bidder reviewed and accepted if deemed quali
fied
What:
-Questionnaires
-CCDC11
How:
-Assessment
Further risk reduction:
-Surety Bonds
-Subguard
Qualification Process
-Should be transparent and defensible
-Takes time and resources from design team and owner
-Difficult not to be subjective
What is evaluated:
-What do we want to know?
-What can be fairly measured?
-Financial stability, bonding capacity
-Details of similar projects completed
-Obligations: current project work loads
-Site experience
-Safety programs/records
-references from previous clients
Surety:

-A 3 party contract with Surety (bonding company), principal (contractor), Oblig

ee (owner)
-Guarantees that the principal will perform the work for the obligee
-different types of bonds
-Functions of Surety:
-Assures bonded project will be completed
-assures the labourers, suppliers and subcontractors will be paid even i
f the contractor defaults
-relieve the owner from the risk of financial loss arising from liens fi
led by unpaid labourers
-smooth the transition from construction to permanent financing by elimi
nating liens
-reduce the possibility of a contractor diverting funds from the project
How do they work:
-For the Owner:
-Bonds guarantee that the contractor will perform the contract
-Pay the labour and materials buills incurred on the job
-knows the contractor has satisfied the surety's pre qualification proce
ss
-For the Lender
-Bonds provide assurance that if contractor is paid, the building will b
e completed and this secures the loan
-For the consultant
-Provide confidence that, in the judgement of the surety, the contractor
is capable of translating the plans into a finished product
-For the attorney
-Bonds provide the security of knowing their clients will be protected s
hould the contractor fail to perform
-For the risk manager
-Bonds provide the satisfaction of knowing that the owner is protected a
gainst contractor failure
Bond Types/Instruments
-PreTender/Qualification stage:
-Consent of Surety
-Bid Bond
-Contract Award Stage
-Performance bond
-Labour and material bond
-Substantial completion
-Maintenance
Key Definitions:
Surety Bond- A written document in which one party guarantees a second party's p
erformance to a third party
Principal- The bonded person or organization that has the duty to perform
Obligee- The third party for whose ultimate benefit the bond is written
Surety- The surety is the party who issued the bond
Guaranteeing- the principals obligations up to the financial and time limits exp
ressed in the bond
Bid Bond
-Prequalifies the principal, provides security to obligee that the principal wil
l enter into a contract if it is awarded
-Guarantees that the obligee will be paid the difference between the principals
tender price and the next closest tender price in the event that the principal i
s awarded the contract but fails to enter into the contract
-If the principal has tender accepted within 60 days from the closing date of th
e tender and the principal enters into a formal contract and gives the specified

security to secure the performance of terms and conditions of the contract, the
n this obligation is void
Consent of Surety (time of tender)
-Provides a guarantee to the obligee that if the principal is awarded the contra
ct, then the surety company will issue the additional required project bonds, su
ch as payment or performance bonds
-Submitted with bid bond, which must accompany the bid
Performance bond
-Submitted to owner at contract signing
-Either a 50% or 100% performance bond can be purchased
-guarantees performance of contract at either 50 or 100% of contract price
Default of Performance Bond
-surety has 4 options to resolve a default on the CCDC bond form:
-In some cases, ex when cost of completion exceeds bond amount, the sure
ty may elect to pay the amount of the bond
-The obligee and surety must agree to accept a responsible bidder to com
plete the contract
-The surety will make funds available to complete the contract as work p
rogresses
-Bond covers cost of completion and other costs to a total amount up to
the bond amount.
-Law suits must be instituting within 2 years from earlier date of the substanti
al completion or when the principal was declared in default
Labour and material payment bond:
-Provides security to subs and suppliers that they will be paid according to ter
ms of their contract
-Owners request labour and material payment bonds so subs and suppliers can prov
ide better pricing if risk of nonpayment eliminated (usually 50% 0r 100%)
-Claimant:
-must have contract with principal
-claim only for goods, services supplied to job
-File claim within 120 days of last day worked or material was shipped
-Always issued with a performance bond
-Amount of bond is stipulated by owner/obligee - usually 50 or 100 of contract p
rice
-Claimant must have direct contact with the principal
-the bond covers on the obligation of the principal to claimants incurred before
the default
-claimants must file written notice to the principal, surety, and obligee by reg
istered mail within time limit required by bond. To protect claim, a suit must b
e filed by claimant within 1 year period
How does a company get bonding?
The 3 C's- what insurers/surety consider
-Character = integrity, honesty, good reputation
-Capacity= ability to complete job (management expertise, manpower and machinery
, knowledge)
-Capital = financial resources to complete job and ongoing work
Contractor insurance
-In qualifying contractors it is important to ensure that they carry sufficient
property and casualty insurance:
-property
-contractors equipment
-tools

-installation and floater

-business interruption
-liability
-automobile insurance
-environmental
Sub guard insurance
-Default insurance program available to construction companies with annual subco
ntract volume of more than $75 million including:
-General building contractors
-at risk construction managers
-design build firms
-primary subcontractors
-Coverage includes the costs of completing any unfulfilled subcontractor or supp
liers obligations, including cost related to subcontractor replacement, job acce
leration, extended overhead, etc.
CCDC 2 document
1. agreement between owner and contractor
2. Specificatoins "front end" (definitions/conditions) and technical specificati
ons (specifications/schedules)
3. Drawings
CCDC11
-Legal structure of contractor
-corporation
-partnership
-sole proprietor
-year established
-financial references
-bank name, location, contact info
-bonding company, location, contact info
-annual value of work in last 5 yrs
-Principal projects completed in last 5 yrs
-Similar or related projects completed
-Letter from surety approving 10% bid, 50% performance, 50% labour/material paym
ent bonds
4 market areas:
-Municipal
-civil
-Commercial and industrial
-land development
The bidding process
1. Research - Chief estimator will do research
2. Estimate Preparation- apply for an obtain bonds
-review insurance requirements
-analyze scope and specifications
-quantity surveying/take-offs
-generate tender construction schedule
-generate bid
3. review & submission
- make sure everything is include, direct/indirect costs
-everyone signs off
4. tender results
5. Project reward
6. pre-job planning meeting
-review scope, contract terms, equipment needs, safety, deliverables

costs included in bids may include:

-labour, materials, equipment (owned/rented), subcontractor, bonding, pe
rmits, etc
Indirect costs include:
-project administrator, pick-up truck, hydro, land telephone, site trail
er, safety expence

In a title block:
-revision history
-engineers seal
-scale
-drawing number
-project name
-type of drawing
tender = estimate + contingency + overheads + profit
Quantity surveyors: produce bill of quantities, reduce tendered costs/errors
-reduces tendering costs
-reduces errors
-equal comparison for tender
estimators: mentally construct project with personnel and decide on construction
methods
- understand scope.
-site conditions, material handling, methods
Free on board (FOB): location at which the cost of material applies
-FOB on site, mean delivery cost is included in quoted price
-FOB factory, means you pick it up
Work breakdown structure: a hierarchal structure used to organize tasks for repo
rting schedules and tracking costs.
-often masterformat as a basis
Gross on site includes wastage in the estimate
To bid or not to bid:
-Desire for project
-Familiarity with market
-size of project
-risk?
Accurate estimating is important, without this contractor cannot compete in a fi
eld, complete a project on time and on budget, and make a profit
Estimated costs:
quantity*unit cost
quantity/Productivity
quantity/productivity*hourly unit cost
Productivity: general efficiency of an individual/organization. Output per work
hour, ex ft/hr, m^3/hr
Corporate overheads: cost of running a business

Profit depends on:

-type of project
-need for work
-number of competitors
-past profit on similar projects
-size of project
-desire for project
Factors affecting profit: type of project, number of competitors, strength in in
dustry, experience
Assessing risks: identify and assess risks in terms of probability and impacts,
categorize risks, and determine how they can be managed.
Determining costs: Evaluate historical records of similar projects, adjustments
made to account for differences (labour market, weather, project complexity)
Historical Data:
Historical accounting standards provide actual productivity values, requires col
lection of labour timecards
Limitations:
-conditions rarely identical (weather, congestion or material storage)
-more detailed data collection may help
-data must be current: changes in methods, crew sizes, skill, technology will af
fect rate
Problems with historical data:
-Time or costs assigned to incorrect cost codes mistakenly or purposely
-Made purposely but unknowingly wrong (ex assigning crane to wrong cost code)
-Assigned to cover or hid overruns (prevent management from questioning site man
agement practices)
Work Breakdown Structure (WBS): a hierarchical structure used to organize tasks
for reporting schedules and tracking costs
-work packages are a small-defined set of tasks or activities that form part of
an overall project scope.
-Often use masterformat as basis
Quantity take off:
-determine work breakdown structure
-study drawings so repetitive items, unusual details known
-maintain standard order of measuring and recording, ex width, depth, length
-relate to location: column, flr, room #
Net in place vs Gross on site:
-Gross on site includes wastage
-material wastage not included until final qualities calculated
-concrete volumes in drilled holes, left over material in trucks
AACE Classifications
Class 5- Concept
-Capacity factor: used in petrochemical industry
-estimate the costs of a new facility at the desired size of capacity ba
sed on the known cost of similar facility at different capacity level:
C2=C1*(Q2/Q1)^m *(I2/I1)
Q, size or capacity
C, cost
I, yearly cost index
m is capacity exponent
Class 4- Feasibility
-Parametric cost estimating model

-algorithms that translate parameters about product into cost results

-useful for cost and value evaluations when not much known about project scope
Class 3- Budget authorization
-Semi detailed unit costs
-outcome - constant + coefficient 1*(parameter A) + coefficient 2*(param
eter B) +...
-Parameters may include gross floore area, number of floors, area or cur
tain wall
Class 1- Detailed Estimate
Equipment factors:
-use cost of permanent equipment
-apply a factor to account for installation and supply of all components
- EFC = ni*Ci*fi
-EFC is the equipment factor cost
-N is number of each type of equipment
-Cis the cost
-f is the factor (2-10)
Granular "A": a mixture of sand and crushed/round stone. Particle sizes no large
r than 1 inch. It is a finishing material for driveways, roads, parking lots, an
d walkways
Granular "B": a mixture of sand and round stone. Particle sizes up to 4 inch. A
sub base material, primarily used as foundation for roads, parking lots, and dri
veways
Site Work
-Landscaping: includes planting trees, bushes, and installing paving stones, sod
-Rehabilitation of quarries, pipeline right of way
-usually subcontracted
Trenches
-for utility installations or foundation structures
-unit measure is usually m, varies with width
-mass movement of earth: open pit mining, highway building, earth dams
-unit measure is m^3 bank or loose measures
Buik Excavation
-Cost is lowest of all site work
-rock or water increase costs quickly
-where buildings or other obstructions are on/near site, shoring is required
-often remove more than strictly required to allow workers access to forms, ensu
re safe slopes
Final Volumes
-Conversions from bank volumes to:
-loose volumes for hauling
-compacted volumes for placement
-swell = (LV/BV) -1
-Load factor = 1/(1+swell) = BV/LV
-Shrinkage = CV/BV
Concrete
-precast or cast in place
-beams, walls, floor slabs precast on site
-may involve prestressing, requires special tools and skills
-ready-mix or batch plant on site
-quality control
Formwork for concrete

-Less than 50% of cost of concrete elements

-job-built or prefabricated
-steel-ply, steel, or aluminum, or timber
Reinforcement QTO
-Size and length of rebar segments are determined, sold by weight
-Splice locations at discretion of estimator
Formwork productivity factors
-Uniformity of sizes, irregular shapes
-number of blockouts for windows
-vertical or curved sections
-types of crafts required to place
Concrete productivity factors
-Method of placement
-Quality of surface area required
-Elevation of cast site
-availability of water for curing
-temperature control requirements
Productivity improvements?
-Automated equipment, welders
-more effective use of equipment and tools
-improved labour training
-improved productivity management
Learning Curve
-Usually given as average values
-Can affect construction if: method is new, activity not regularly performed, ac
tivity out of sequence
-developed in 1930's by wright- aircraft manufacturing
-applies to: repetitive activities, crews or individuals, or continuous work
Unit costs:
-include shipping both ways, assembly, and disassembly
-pipeline construction
-consider land rental, security, and jurisdictional taxes
Information sources:
-manufacturers' publications: CATERPILLAR, GM, Hitachi, etc
-Road builders' publications (rental costs), MTO guidelines
Cost indexes
-Dimensionless number assigned to a given year relative to a base year; ratio of
cost movement
-output, input, and hybrid indexes
Input indexes:
-Shopping cart of common materials, equipment, and trade labour hours
-represent the inputs to the construction process
-reflect market prices
-costs are collected from collective agreements and material distributors/retail
ers
-quantities are constant in every location
-simplest to produce, leas error
-not biased
-use limited
Output indexes:

-attempts to measure the total construction cost of a competed structure in each

location
-Done in 2 ways
-actual tender prices for projects are collected: costs must be adjusted
to account for different characteristics. Extremely difficult to collect info a
nd adjustment
-Standard project: distributed to affiliated industry. Produces indexes
that reflect location conditions including labour skill, availability, and produ
ctivity. Requires significant cost estimating resources
Hybrid Indexes:
-Exploit the ease of input index development and reliability of output
-focus on the installed costs of smaller building elements such as foundation wa
lls, insulation or roof membranes
-organized by masterformat
-labour cost, material, and total costs including overheads are provided
-if costs provided, may contain productivity differences
Purpose of Scheduling
-Study the work
-establish a baseline target for project
-determine sequence of activities
-communicate
-manage parties involved in project
Levels of Scheduling
-Master schedule (owners)
-detailed schedule (contractors)
-Trades (2 weeks look ahead)
-schedule for communication with public
Bar Charts
-Schedules were primarily bar charts
-time along x and activities along y
-showed what should be underway, but no logic of activities
-only for simple stuff
Gantt Chart
-developed in 1917
-advantage: easy and simple, clearly represents schedule of project
-disadvantage: doesn't show interrelation and constraints, or critical activitie
s
Critical path method (CPM)
-pros: comprehensive, provides critical path and logic of activities
-Cons: can't see activities underway on particular day, poor communication tool,
easy to ignore activities not on critical path. ALWAYS optimistic
Two types
-Arrow diagramming method (ADM)
-activity on arrow, used very little
-node shows an event (start or finish)
-event not achieved until all activities entering node have been complet
ed
-length has no significance
-Precedence Diagramming method (PDM)
-activity on node
-arrows represent logical time relation between activities (length has n
o meaning)
Dummy activity

-0 cost and 0 time

-2 main applications
-to maintain logical sequence of event
-to maintain specific activity identificatino between events
Finish to start (FS) means an activity starts after completion of its predecesso
r
Start to start (SS) the initiation of the successor activity depends on the init
iation of the predecessor activity
Lag: the time difference between 2 events
CPM calculations
Total Float (TF): amount of time where the start or finish of an activity can be
delayed without causing the project to last longer
- TF = LS-ES = LF-EF
Free Float (FF): amount of time where the start or finish can be delayed without
delaying early start of succeeding activities
-FF = min ES of following activities - EF - Lag
-TFFF
Critical Path: longest path in network
-FF = TF = 0
Schedule Compression (Schedule Crashing)
-To accelerate project, achieve finish date
-raises cost, project duration not reduced unless on critical path
Normal duration of an activity happens when the normal resources and normal work
ing hours are allocated to project. Its possible to decrease duration by allocat
ing more resources which will result in higher cost
Methods of Resource allocation
-Series Method
-Schedule activities to start as soon as their predecessors have complet
ed
-1st priority: activities already started
-2nd " "
: activities with earliest late start
-3rd " "
: Activities with least total Float
-4th " "
: activities with largest number of resources
-5th " "
: Activities first in list
-Parallel Method
-Activites can be interrupted
-schedule activities to start as soon as their predecessors have been co
mpleted
-1st : activity with earliest late start
-2nd : activity with least TF
-3rd : Activity with largest number of resources
-4th: activity that occurs first in the input order
Resource leveling
-level the resources by moving activities based on their free float and total fl
oat to avoid delays
-performed by:
-manual: Trial and error, or minimum moment algorithm
-heuristic methods
-software algorithms
Construction Lien Act:
-Entitles anyone who supplies services or materials to and improvement for an ow
ner, contractor, or subcontractor to register a lien

-A lien is a legal claim on another's property as security against the payment o

f a debt
-If the owner is the federal government, or if the property is a street or highw
ay, or a railway right of way, liens are "not possible" in terms of registering
against a property
-A claim for lien is possible on government projects
-Binds the municipal or provincial government to pay the money as if a l
ien were in place.
Registering a claim of lien
-within 45 days after issuance of certificate of substantial performance for the
entire project, subcontract work, generally, from date of last supply
-if the contract is to supply in the early stages of a job, then to return at th
e end, lien rights would remain alive for the duration
-Supply of labour or materials at distinct points in time could be viewed as sep
arate contracts, with lien rights under the early contract expiring first
-Must be registered at the land registry or land titles office against the prope
rty where the improvement is located
Claims can be for: unpaid contract amounts, wages, rentals, supply of materials,
improvement of value, engineering services
Engineers have lien rights if the value of the land was enhanced, for example, d
esign work related to roads and site services are site specific and cannot be tr
ansformed to another location as a building design can.
Holdbacks
-First or basic holdback: for work or services performed before it is certified
that the contract is substantially performed
-Second or finishing holdback: to give finishing trades claim for work done betw
een substantial completion and project or contract completion
Certificate of substantial performance
-When the improvement to be made under that contract or a substantial part there
of is ready for use or is being used for the purposes intended
-when the improvement to be made under that contract is capable of completion, o
r where there is a known defect, correction at a cost of not more than
-3% of the first 500k of the contract price
-2% of the next 500k
-1% of the balance
Contract is completed
-when the price of completion, correction or last supply is not more than the le
sser of 1% of the contract price, and 1k
-the certifier must give a copy of certificate to owner and contractor within 7
days of certification. The contractor must publish a copy of certificate in a co
nstruction trade newspaper. The court may declare substantial performance if so
applied.
Revenue
-revenue stream is initiated when contractor invoices client
-frequency of invoices depends on contract conditions
-30, 60, or 90 day delay from invoice submission to payment
-also, holdback is applied (10% in ontario)
When adding revenue, document:
-when invoice was submitted
-when payment expected
-if invoice is 10k how much will the payment be?
-lien act for construction

Project Control challenges

-costs are driven by the accounting system
-accounting system is not updated daily
-reporting is run monthly or less often
-then reports have to be sent to project
-by the time you find out the project is over budget, several weeks have passed
-need a site-driven system
Progress Curves
-S curves used to forecast cash flow, materials, or resource requirements
-Curve envelope showing ES or LS
-One "as planned" line
-progress can be plotted
S curves for money spent
-if comparing budgeted cost to actual cost, there is no indication of ho
w much work has been accomplished
Earned Value
-Used widely in construction
-more objective than estimated percent complete
-not as detailed and expensive as physical measurement
-compromise
-An approach where you monitor the project plan, actual work, and work-completed
value to see if a project is on track
-Indicates how much of the budget and time should have been spend compared to t
he amount of work completed to date
-Has 3 basic parameters:
-what value of work SHOULD have been accomplished to date?
-How much value has been realized to date?
-How much has actually been spent to date?
-Work hours taken from time cards (are labour hours sufficient?)
-Foreman reports actual quantities installed
-need rules for taking credit
-EV = actual quantities * estimated or budgeted productivity per unit of quantit
y output
Budgeted cost of work scheduled (BCWS)
-the budgets of the activities that are planned or scheduled to be completed, ba
seline of project
Actual cost of work performed (ACWP)
-Total costs actually incurred and recorded in accomplishing work performed duri
ng a given time period for a schedule activity or work breakdown structure compo
nent. Can be direct labour hours alone, direct costs alone, or all costs includi
ng indirect costs.
Budgeted cost of work performed (BCWP)
-budgeted cost of work that has actually been performed in carrying out a schedu
led task during a specific time period
-Forecasting variable used to predict whether project will finish over or under
budget
-Can use standard dollar expenditures, eg 10% costs booked for each 10% time int
erval
-Or use 50/50 rule- 1/2 budget assigned at start of activity, other 1/2 at end,
OK if lots of activities
-Or use 0/100 rule- or use Milestones where long activities with milestones
To set up the Earned value system

-Establish work breakdown structure

-Identify the activities to be scheduled that represent the entire project
-Allocate the costs to be expended on each activity
-schedule activities
-tabulate, plot, and analyze the data to confirm that the plan is acceptable
Work breakdown structure (WBS)
-a hierarchical structure used to organize tasks for reporting schedules and tra
cking costs
-work packages are a small-defined set of tasks or activities that form part of
an overall project scope, usually the lowest level of the WBS
-MasterFormat is most common
To use earned value calculations
-Update the schedule by reporting activity progress
-enter actual costs of activities
-execute earned value calculations, print and plot the reports and charts
-analyze the data and write performance narrative
Completion:
BAC = budget at completion
EAC = estimate at completion = actual + estimate to complete
= ACWP/BCWP * BAC = BAC/CPI
VAC
= Variance at completion
= BAC - EAC
Percent complete = BCWP/BAC
Percent money spent = ACWP/BAC
Cost variance (CV) to date
-Can be positive or negative
-If positive, project under budget
-positive variances may enable you to reallocate money and resources from tasks
or projects with positive variances to those with negative variances
-a negative, project over budget and need to take action
-CV= BCWP-ACWP
Cost performance index (CPI)
-A performance ratio that allows you to compare to other tasks or projects
-CPI = BCWP/ACWP
-a value greater than 1- project under budget
-less than 1, over budget
-CPI of 0.8 means you've spent 25% more on task than budgeted
Schedule Variance (SV)
-Difference between the current progress and the scheduled progress of a task, i
n terms of cost
-SV = BCWP - BCWS
-if negative then behind schedule
Schedule performance index (SPI)
-SPI = BCWP/ BCWS
-A performance ratio that allows you to compare to other tasks or projects
-A value greater than 1 indicates that the project is ahead of schedule
To-Complete Performance index (TCPI)
-The ratio of work remaining to the funds remaining as of the status date
-Estimated cost ratio required for the project to meet the project's budget goal
-If you are under budget then TCPI will be calculated based on original budget,
ie BAC
-If you're over budget then first estimate new budget and get it approved. Then

calculate TCPI with new approved budge; ie EAC instead of BAC in the denominator
-TCPI = [BAC-BCWP] / [BAC - ACWP]
Comments:
-Best way to
-information
-information
-better ways

prevent surprises, workable tool

helpful but is it worth the cost of obtaining it
often available too late
to obtain information

Unions in Canada - History

-Guilds - first trade associations
-Highly skilled went from house to house to sell services
-Looked after families of members who were hurt or killed
-with industrial revolution, trades worked in shops
-unskilled workers moved to cities and undercut wages to get work
-by late 19th century, industrial unions organized in factories
-employers resisted unions- law defined as monopolies restricting trade
-strikes were made illegal- all rights to employer
-management hired guards to shoot strikers
Canadian Labour union
-first attempt at national central organization to represent labour
-CLU platform called for shorter hours, stop use of convict labour, no employmen
t of children under 10, enforcement of minimum standards of factory sanitation a
nd ventilation, and government bureau of statistics to provide information on wa
ges and working conditions
-wanted to publicly fund education, opposed growing monopolies
-urged the use of arbitration rather than strikes
Labour Relations Act of Ontario
-Collective bargaining, frequent changes
-recommended employer organization have the right to make application to become
sole reps of employers who commonly bargain with the same union
-Organization had to represent over 1/2 of employers employing over 1/2 employee
s with a particular trade
What unions do
-run on union dues - their strength based on membership
-supply and control a skilled workforce
-strongly promote safety awareness
-act as liaison between employees and management if problems arise
-promote economic growth
-rely on power to make gains
Demonstrate dissatisfaction by:
-Absenteeism, turnover, work to rule, wobble, strike
Collective agreement: an agreement between the employers and the employees that
outlines remuneration, work conditions, responsibilities and restrictions
Bill 31
-allows owner to carve out agreement from collective agreements for individual p
rojects
-owner must show support of 40% of unions to enter into negotiations
-requires 60% ratification
Bill 69
-Some collective agreements placed severe restrictions on employers' ability to
select specific union members when hiring and to move workers to projects fallin
g under another local's jurisdiction

-gives them rights to select up to 75% of workers and transfer up to 40% of them
from 1 area to another

Manufacturing vs Construction
-Manufacturing is further ahead in advancing technologies and methods for handli
ng, tracking, and managing materials
-fabrication facilities improve efficiency by becoming more like manufactures th
an constructors
-most external factors can be controlled
-external factors drive efficiencies (weather, site condition, soil type)
-difficult to predict/forecast
-managing different skills/expertise
Material Management
-a system for planning and controlling all efforts necessary to ensure that the
correct quality and quantity of material are specified in a timely manner, obtai
ned at a reasonable cost, and available at the point of use when required
-Efficiency system leads to improved productivity
-poor quality in MM process becomes apparent immediately at point of use
-Actually poor quality of engineering may not be apparent
Poor MM
-Problems occur in:
-quantity (not enough or too much)
-quality (wrong specs)
-material shortages disrupt work
-poor quality drives efficiencies
Planning: material planning includes quantifying, ordering, and scheduling. It i
s essential to increase productivity, profit, and completion in a timely manner
Procurement: The purchase of materials and services from outside organizations t
o support the firm's operations from production to marketing, sales and logistic
s
Logistics: emphasizes movement and includes planning, implementing, and controll
ing the flow and storage of all goods
Handling: The flow component that provides for their movement and placement
-Containerization and packaging
-Pallets, containers, protection, etc
-movement to site (truck, rail, water)
-May require special permits (ice road, wide load)
-Know when arriving at site
-off loading at site and storing (requires proper equipment)
-Horizontal movement
-conveyors, cranes, trucks, trailers
-Vertical movement
-crane, concrete pump, elevators
Inventory and waste control: A technique devised to cover and ensure all items a
re available when required.
-Setting standards for construction performance through pans and specifications,

measuring variance, etc. - Performed by contractor

-Application of standards and procedures- done by owner or owners rep
Quality
-Costs money (skilled labour, monitoring and verifying quality of output, correc
ting bad work)
-Lack of quality costs money (future business, reputation)
-Design-build contracts are presumed to bring owner a better quality product
Random Sampling
-used to get representative sample so that entire population does not have to be
sampled
-can be difficult to plan, justify, and must be unbiased
DOT quality assurance
-Percent with limits
-lower and upper limits provided to contractors
-count samples that fall between limits
-penalties or payments determined
Quality assurance
-Combination of planned and systemic actions necessary to provide adequate confi
dence in achievement of required quality
ISO9000
internal organization for standardization
-consortium of 100 of worlds industrial nations
-NOT a set of standards or specific to one industry
-defines key terms and acts as a road map for other standards in series
ISO9001: defines the model for a quality system when a contractor demonstrates t
he capability to design, produce, and install products or services
ISO9002: quality system model in production and installation
ISO9003: quality model for QA in final inspection and testing
ISO9004: guidelines for any organization wishing to develop and implement a qual
ity system
ISO 3 iterative parts
-Planning: required to ensure objectives goals, authority and responsibi
lity
-Controlling: required to ensure goals and objectives are met
-Documentation: used for feedback on management system