What is Construction Project Management?

GlossaryFebruary 04, 2021

The basics of construction project management?

The most basic level of construction project management controls three main stages of a construction project: planning, coordination, and execution. Construction project management is a sophisticated profession that requires a substantial amount of knowledge in many different areas, including law, business, finance, mediation, and such.

The necessity to have that much knowledge is driven by the nature of construction project management as a job that often includes complicated tasks from many different fields, depending on the current project stage and many other reasons. To handle all of that, a construction project manager needs to have defined communication skills, extensive problem-solving capabilities and the previously mentioned wide variety of knowledge about different parts of the building process as a whole.

A more abstract definition of project management as a process is defined by PMI (Project Management Institute). It explains project management as the art of directing resources, both human and material, throughout the lifetime of a project by utilizing various management techniques to achieve the end goal when it comes to costs, time, quality, scope, and all of the participating objectives.

A brief look into the history of construction management

As it stands, project managers have existed when there was a need in complex building projects. For a long time, this duty was on the architect’s shoulders, as it is thought to be the case with many ancient structures from Rome, Egypt, and such.

In the age of the Renaissance, there have been more popular and unique designs from specific architects. One of those examples is Sir Christopher Wren of England, who designed a number of buildings in both late 17th and the early 18th centuries, including the well-known St. Paul’s Cathedral in London. The wide variety of skills and knowledge that Wren possessed directly foreshadowed the skill types that would later be required from anyone to handle a complicated construction project, even though in that age it was all about advanced mathematics, physics and design.

Another example of the evolution of construction management is the set of rules that began to take shape across corporate America around the time of World War II – many of the skills were put into many different civil construction projects. This shows the successful appliance of the basics of construction engineering projects that were applied to a number of corporate projects.

The digitalization trend is hitting the construction management industry, with more and more details being addressed digitally, and more to come in the near future. One of the prime benefits of this digitalization is the ability to track and manage the work process from anywhere, due to the sheer number of mobile-friendly technology and software.

General types of construction management

Construction project management can be broken down into several project types, but that can only be achieved by going back to the basics. There are three big construction types known to anyone – industrial, infrastructure and buildings. Each of those can be either residential or non-residential. Three construction types listed above can also be split into seven subsets, such as:

  • Environmental
  • Residential
  • Institutional
  • Commercial
  • Heavy civil
  • Agriculture

With all that in mind, it’s possible to break down the construction project management in ten different markets:

  • Manufacturing
  • Transportation
  • Telecom
  • Water
  • Power
  • Buildings
  • Waste/Sewer
  • Hazardous waste
  • Petroleum
  • Industrial

Construction management and a project manager’s role in it

The project is always expected to move in accordance to the schedule – and the project manager is the one responsible for that. Projects should ideally be finished on schedule, within budget and should meet all of the plans, specs and codes of the building. It’s not uncommon for a project manager to work on somewhat different tasks, such as hiring or vetting subcontractors/workers, creating a conflict resolution strategy, setting finances, calendar and parameters, and so on.

There are several different views on the full list of the construction manager’s responsibilities, even though the difference between them is not always significant. An example of that is the Construction Management Association of America (U.S. construction management advocacy and certification body) declares that there are 120 common responsibilities of a construction manager that can be split in seven main categories, such as:

  • Time management
  • Contract administration
  • Cost management
  • Safety management
  • Project management
  • Quality management
  • Construction management (professional practices)

Construction management and a contractor’s role in it

Any construction project starts with a design phase, and as soon as that’s over – it’s time for the bidding process to different contractors if they are interested. There’s a number of qualifications that contractors must be able to prove to be considered in the first place, such as the ability to handle:

  • Human resources
  • Engineering
  • Public safety
  • Decision-making
  • Drafting
  • Quality/time/costs management.

The choice between contractors that meet the requirements is made through either the low-bid selection, the qualifications-based selection or the best-value selection.

The basics of construction project management – winning a project.

As soon as the project owner is ready to begin the bidding process, they will share their project’s information with a wide variety of contractors, subcontractors, and more. The first part of the process lies in cost estimates when the contractors evaluate the blueprints and the material requirements to assess the total cost of the owner’s project.

There are two known bid types: open bid and closed bid.

Open bids are usually applied to public projects and often advertised, allowing for any contractor to put in an offer. Closed bids, on the other hand, are when the owner is giving a specific set of contractors invites to the project so that they can respond with their own bids.

After getting all of the bids, the owner’s job is to choose one to proceed with. There’s three main ways of choosing the correct bid as an owner:

  • Low-bid selection
  • Qualifications-based bid selection
  • Best-value bid selection

As the name suggests, the low-bid selection means choosing the lowest possible price for the project’s completion, while the qualifications-based selection puts primary focus on the capabilities of the contractors (the assessment of their capabilities is done through requests for qualifications, or RFQ) and chooses the one with the best capabilities available. The last selection type (the best-value selection) is the combination of the first two, looking for the best combination between the project’s cost and the contractor’s capabilities.

The last part of the bidding process comes after an owner has chosen a contractor, and now they are negotiating a payment agreement. There are four main payment models that are commonly used in the industry:

  • Guaranteed maximum price. This contract sets up a specific price that the combination of the total cost and the contractor’s fee can not exceed.
  • Cost-plus-fee. A model that combines the total project cost with a fixed percentage on top of it that goes to the contractor; since the owner is covering all of the possible additional costs, this payment model is widely regarded as the most contractor-friendly one.
  • Unit price. If there’s no way to agree on a specific cost ahead of time, both parties are going for a unit-price model, which implies that the owner pays a specific unit price for each completed phase of the project.
  • Lump-sum. In this case, there’s a fixed total amount that both sides agree upon, and the owner pays the entirety of the agreed sum, ignoring any changes that might’ve happened in the process, from the final bill being higher than the initial one to the project not being successful in the first place.

Obstacles for construction management as a process

It should be obvious by now that planning and scheduling in the construction environment is complicated, to say the least. The system in general has too many people and other moving parts, almost guaranteeing that you’re going to face one of the following problems that might arise in the construction project management environment:

  1. Data mismanagement. The lack of a unified data-sharing platform spawns a surprising amount of problems, such as data inaccuracies, the lack of simple info sharing capabilities for stakeholders, or just the additional time it takes for the construction team members to locate the necessary project plan updates, material cut sheets or revised drawings, taking away as much as 5+ hours of work time per week.
  2. Communication problems. This example of a seemingly easy problem causes a wide variety of issues such as budget overruns for a lot of projects (this costs time and money), this is why the communication skills are of the utmost importance for any leadership figure, especially in the construction project management.
  3. Unclear milestones. The lack of clear milestones, especially the project finish milestone, often leads to a variety of different problems down the line, mostly appearing as the scope creep.
  4. Stakeholder collaboration problems. When it comes to reworks, it’s important for the entire rework management process to have all of the stakeholders involved to reduce the amount of potential problems and to increase the overall efficiency.
  5. Safety standards violation. Surprisingly enough, safety throughout the construction process is still an issue, and the cause of those kinds of problems a lot of times is the lack of attention to safety matters in the first place.
  6. Refusal or inability to work with the newer technologies in the industry.
  7. Organizational problems. This topic includes a lot of different issues that could’ve been perfectly avoided but ended up causing problems down the line; some of the most common ones are the project data misplacement, the lack of mistake-handling procedures and the general absence of conflict management measures of sorts.
  8. Problems with budgets. Going over the project’s budget might just be the most popular issue for a lot of projects nowadays; this is the direct responsibility of a project manager since the research must be done, the prices must be calculated, and the client should have an honest assessment of what can be achieved with their current budget.
  9. Insufficient employee education. With the recent growth of the employment in the construction industry, it’s always important to thoroughly check the credentials and skills of each of the project members. An unexpected project setback is the least of potential problems that the absence of a proper worker education might cause.

Construction projects and their business models

While the bidding process is usually consistent for the majority of projects, there are two completely different business models that are utilized in the construction industry:

  • Design-bid-build contract. A prevalent business model in which the owner can choose their contractor when they already have a complete project design ready – meaning that the design phase was completed beforehand, by either an engineer or an architect.
  • Design-build contract. In this case, all of the project’s stages are performed by the same contractor, including the design phase and all of the different construction steps. This approach can technically lessen the time it takes for the project to be completed since both the design and the construction can be done simultaneously.

Both of the business models above are noting the design phase as the first stage of the bidding process. It is possible to split the design phase into two somewhat different approaches – schematic and programming. Both of them are representing raw drawings/sketches, and the digital models of the project, respectively.

The process of project management and the main principles

The construction as a process can be started right after the bidding process ends, with the stages of a construction project being somewhat similar to the traditional project management. The Project Management Institute has developed a unified five-step plan of a regular construction project that most of the construction project managers are already familiar with and follow in most cases:

  1. Initiation.

A business case needs to be developed and evaluated as the beginning phase of the construction project to see if the project is feasible in the first place. Stakeholders may be asked to perform feasibility testing if they deem it necessary, and all of the parties involved must agree to proceed with the project for the project itself to actually be constructed in the first place. Another significant part of the first phase that is done after the feasibility testing is the project initiation document (PID) that includes the business case and the list of business needs.

  1. Planning.

The next part of the process is the roadmap development phase for all of the parties involved. The main document of this stage is the project management plan – a formal document created by the project manager to set baselines for costs and scope, to set up a schedule and to guide execution and control. Other documents that are created in this stage of the process are presented below:

  • Communication plan
  • Risk management plan
  • Scope statement/scope documentation
  • Work breakdown structure
  1. Execution.

The large part of the actual construction work is performed within the borders of this stage, typically after a kickoff meeting. After that, the project team needs to constantly assign resources, implement project management plans, complete tasks, set up tracking systems, update the schedule, and so on.

  1. Monitoring.

It’s not uncommon for the monitoring to happen alongside the execution stage, and it is crucial to measure progress and performance, ensuring that everything proceeds according to the plan.

  1. Closure.

The last stage of the process signifies its completion, often complemented with a post-mortem meeting to discuss what parts of the project met the requirements and which ones didn’t. The last part of this is for the project team to create a list of any remaining tasks, to perform a final budget and to prepare a project/status report.

Different stages of a construction project

While the construction management technically begins with the bidding process, the main part of it starts a bit later, as soon as the contract is finalized. Generally speaking, the construction project can be divided into 7 different stages:

  1. Design.

This stage is mostly performed by an architect or an engineer, starting off with the feasibility assessment based on various different parameters of the project, such as the number of rooms, the building size, the amount of space required, and so on. The next step after the feasibility assessment is the schematic/sketch generation, as well as performing research about the equipment type that’s needed, the different materials needed, etc. After the design process is complete, it acts as a signal for a bidding procedure to begin.

  1. Pre-construction.

The contractor that successfully wins the bidding process is then supposed to be working together with the company’s project team. Some of the participants of the project team are a project manager, a superintendent, a field engineer, and more. This combined team is then tasked with preparing the construction site for the actual building process, including the examination of the site to know about and/or prevent any unexpected situations connected with the surrounding environment.

  1. Procurement.

At the procurement stage, the team buys everything that’ll be needed for the construction project. This stage might easily turn out to be the shortest one in the list, or it can be a huge problem for all of the parties involved, causing setbacks, arguments and other problems – the project’s size is the deciding factor in this case, as well as the size of the company that was hired to do this project in the first place. It’s not uncommon for big players in the construction market to form dedicated parts of the company solely focused on material procurement, buying materials in large quantities when working on multiple projects at once. At the same time, smaller projects would have it easier finding limited quantities of materials from local suppliers or hiring local labourers, greatly reducing the overall complexity of this step.

  1. Construction.

The construction phase starts off with the superintendent arranging a meeting with subcontractors and material suppliers to set the rules for the collaborative work. The preparation part comes next, performing tasks like setting up a temporary storage facility, creating material handling plans, establishing safety programs, etc. As the name suggests, the preparation part is usually followed by the beginning of actual construction.

  1. Commissioning.

Commissioning starts off as soon as the construction is complete, and consists of two main parts: equipment and systems’ testing to be completely sure that everything is operating correctly before turning over the results of the construction to the owner, and the training of the owner’s facility staff to be able to properly operate different systems and perform maintenance when needed.

  1. Occupancy.

This step encompasses the entirety of the warranty period, and it begins as soon as the owner starts using the constructed building for their own purposes. The warranty period ensures that all of the materials, equipment and the overall building quality meets the expectations specified in the contract. There are two general warranty types: implied warranty – the one required or established by law, and the express warranty – the one that’s included as a part of the contract.

  1. Project closeout.

Tying up all of the loose ends is what this last stage is all about. The team should formally complete all of the remaining contractual obligations to consider the project finished. A post-project review is sometimes performed as the aftermath of the entire job, and the project completion report is often required for the future reference, at the very least.

Scheduling and organizing a construction project

The complexity of construction projects makes it so that it’s often crucial for all of the participants of the project to stay on schedule so that there are no problems down the line.

Speaking of organization strategies, there are several different parts of the project that need proper management and organization in any construction project, such as:

  • Contract management – setting expectations and procedures around the person of authority, monitoring and reporting methods, how contracts are modified, which financial audits are needed, etc.
  • Records management – storage, retrieval and distribution of project records in a safe and secure manner.
  • Process of project control – the scope of the project, its schedule and costs are all managed and tracked in this part.
  • Planning of contract procurement – procurement document standardization, setting up the expected contract price, estimating the amount of work for specific contracts, etc.
  • Drawings – the changes that have been made throughout the construction process are reflected in the specific drawings that the contractor is supposed to submit when the project is almost finished.
  • Project requirement definition – the details of project deliverables.
  • Daily documentation – diaries, logs and daily reports are kept as reference guides after the work is done for any potential problems in the future
  • Commissioning – includes a number of different tasks that are all representing the initial idea of the project being followed as planned, including issue-resolving, help with coordination and more.

While organization helps you with prioritizing and organizing the important project info, it’s also much easier to create a comprehensive project schedule when all of your organization documents are in one place. There are several different scheduling techniques out there, and the difference between them is quite noticeable:

  • Q scheduling: Three of the main pillars of this technique are the total project cost, the specific relationships between various tasks and the order that those tasks are performed in. This technique is the closest to reality but requires specific software to perform and takes much more effort to evaluate everything for this schedule to prove advantageous.
  • Critical path scheduling: might be the most popular scheduling technique, calculating the lowest possible amount of time required for the project to be completed, and the start/end dates for all of the project tasks. This plan makes it obvious that every delay in a specific operation would result in a delay for the entire project.
  • Gantt charts: One of the most user-friendly methods of planning a project’s schedule, with project timeline visualization in the form of horizontal charts that look like a number of cascading bars. It can work with task names, dates, durations, end dates, and so on.
  • Line of balance: road construction is the most common client type for this technique since it is the most suitable for repetitive work. The idea behind it is that all of the different facts about the project are collected at different time intervals and then compared to the expected project’s plan. A resource allocation is also required for each step to prevent unneeded delays.

Issues, problems and other legal matters in the context of a construction project

A specific level of uncertainty is not uncommon for construction projects in general, but it also creates conflicts in project teams. Construction project managers are supposed to resolve those conflicts or other disputes to perform risk identification and risk mitigation tasks.

First of all, resolving disputes. Conflicts are often expected to happen sooner or later, and one person that would be the most likely to have to resolve the issue is the project manager. Some of the most common starting points for conflicts are conflicts of interests, resource limitations, lack of clarity, poor communications or power struggles. Most of the time, each conflict requires a unique approach, but there are also some known resolution strategies that might help in specific cases, such as:

  • Arbitration. The most expensive option out of the three, requires each party to be represented by the attorney, with witnesses and evidence being presented. The arbitrator’s final decision is considered a binding agreement and supposed to end the conflict at its core.
  • Mediation.  A simple case of a third party being hired to resolve the dispute, it is considered the cheapest solution and the least time-consuming one.
  • Mini-trial. A mini-trial is performed in a specific setting and includes a paid attorney or an advisor as participants of the trial. The agreement at the end of the trial is not binding and can still be broken.

Second of all, risk management. Risk management plans are often created to attempt to manage all of the project’s risks, as well as defining the roles of the staff in the risk management department, identifying the potential risks and categorizing them in terms of the potential impact and the likelihood of a specific risk happening in the first place.

A third part of the requirements expected of the project manager is the understanding of legal principles. Construction management can encounter several different areas of liability in the process of working on a specific project. Some examples of potential claims for failing to see the parts of the process that produce defective results are:

  • Higher-than-estimate bid
  • Overhead extensions
  • Project delays

Unfortunately, a lot of the professional liability policies do nothing when it comes to covering aspects of faulty workmanship (be it fabrication or installation) or some economic risks, so it’s up to the project manager to make sure that there’s an appropriate coverage and that everyone is doing everything they can to avoid any claims or liabilities.

Environmental/neighborhood impacts of a construction process

While it is possible for construction project managers to plan for licensing, permits and local regulations, it’s also important to remember that nature might also be a part of the construction process, affecting your plans in many different ways. There’s a relatively large number of potential factors that might impact your construction process, such as:

  • Vegetation. Some trees and/or vegetation on a construction site could easily be the subject to environmental safeguards and would have to get a designated safe zone for the growth.
  • Stormwater pollution. The waste control is important since it’s possible that some of the leftovers from the construction could be carried to the nearby water sources by the stormwater with ease.
  • Wetlands. In the United States, wetlands are considered some of the most heavily protected areas, and contractors must be extremely vigilant to prevent contaminants and leftovers from the construction from entering the restricted wetlands area.
  • Dust/mud. Since the construction process, in general, creates a lot of dust, the accumulation of said dust could easily disrupt the nearby homes or businesses. An easy way to prevent that is to drive a water truck to a site and spray water all over the place – but this generates mud, which should be cleaned off and/or moved before it can spread out to surrounding areas via construction vehicles.
  • Endangered species. As soon as an endangered species is found on-site, it is a requirement to immediately cease all of the operations and wait for the authorities to assess the situation. After that, the contractor should comply with a decision from above as to prevent the endangerment of that species.
  • Cultural/Historical artifacts. A similar procedure applies to any objects found on site that might be considered artifacts – such as arrowheads, early tools, bones, etc. A construction process must be immediately halted until the artifact is studied and removed.

Construction project management as a job

Construction project management as a career is a good choice for someone who likes building and design but doesn’t like too much of the actual drawing in the process. It’s not uncommon for construction project managers to be paid well, but the amount of work is also significant. Here’s the bare minimum of skills that is usually required from anyone attempting to get a construction project management post:

  • Problem solving
  • Time management
  • Document management
  • Leadership
  • Understanding of the building processes
  • Project coordination and overseeing capabilities
  • Extensive communication skills
  • Knowledge in the field of construction scheduling software, as well as general computer skills.

The construction project management is capable of offering a number of different roles, with most of them requiring a more specific technical background. Some examples of such job titles are listed below:

  • Project engineer – a liaison between the project manager and the technicians
  • Project manager – general supervisor with planning capabilities
  • Field engineer – in-person surveyor of the construction process, the “survey party”
  • District construction engineer – technical services department management
  • Construction manager – often called the site manager, mostly responsible for running and the maintenance of the construction site
  • Operations manager – strategy development and resource allocation (mostly in large companies with many projects in the works at once)
  • Project coordinator – the assistant of a project manager, acting as a liaison, keeping records, tracking budgets and so on

There are a lot more technical roles included in the construction project management department, such as the design engineer, project architect, planning engineer, and more. At the same time, there’s no shortage of soft-skilled roles that are also needed for the entire system to work, including schedulers, project planners, design managers, and many more than that.

Sustainability in the construction industry

“Green building” or “Green construction” is all about focusing on making the structures to be more eco-friendly and energy-efficient, and it is a significant area of growth in the construction industry as a whole. Environmental responsibility is the main focus of this effort, and it applies to both the building process and the actual building itself.

This is especially important for the project manager since most of the sustainability-related operations have to be initiated by him or her in the first place. This includes environmental issues and environmental compliance in the area of the project, understanding of how the project affects the environment, ensuring the proper disposal of waste, finding “greener” materials, and so on. It’s also not uncommon for the “green” project managers to be required to have a working knowledge about LEED (Leadership in Energy and Environmental Design) and its documentation requirements.

About the author

James Ocean

BIM/VDC Specialist. James Ocean is Head of BIMspiration at Revizto and keeps everything moving onwards and upwards. From supporting and teaching our internal team as well as our clients, James shows us the ins-and-outs and how to best leverage Revizto to maximize workflows, cut costs, and get all types of projects through the finish line.

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