mid term

acceleration

Acceleration is the process of speeding up the work of a contractor so that a particular activity, or the project as a whole, can be completed before the date required under the contract. Generally, it is the client that requires the acceleration of construction work.

pay when paid

A "pay when paid" clause is a payment clause that states that the contractor is obligated to pay its subcontractors following receipt of payment from the owner. In other words, if the owner delays three months in paying the contractor, the contractor has no duty to pay you during that period of delay.

responsive bidder

A bid or proposal package that meets all of the requirements of the solicitation instrument

responsible bidder

A bid or proposal package that meets all of the requirements of the solicitation instrument/bid requirements. The bid, will conform to the solicitation will be the most advantageous to the entity will be chosen.

retainage

A certain percentage of money owed to the contractor for work progress that is held back by the owner to encourage completion of the project

addendum

A change or addition to the contract documents issued after the documents have been released but before the bids are due.

agreement

A construction agreement is a contract between the owner of a property and a general contractor that outlines the details pertaining to work that is to be completed on the property in question. It must be a voluntary expression, clear and can be completed with reasonable certainty, tells what is desired and what will be done in return, must be in total compliance, and have and overt action of acceptance.

liquidated damages

A daily amount of money paid by the contractor to the owner for each day that the project fails to meet the completion date specified in the contract. Not all contracts contain a liquidated damages clause.

lay-down area

A designated area on the building site where large orders can be stored and sorted in an organized manner so that the parts can be easily identified for use on the project.

meeting of the minds

A meeting of the minds happens when two parties enter an agreement and each party understands the commitments they are making. ... If a mistake is made when the contract is written and the contract requires the parties to fulfill a commitment that they did not expect, then a meeting of the minds has not taken place.

profit sharing clause

A profit-sharing agreement generally expresses the ratio you'll use to distribute profits as well as how you'll divide any losses. Ratios may be determined by the amount of investment each partner put into the business or you may have an agreement that only divides profits, leaving you to take the hit for losses.

partnering

A team-building technique, calling upon the parties to the construction contract to establish a common set of project goals and objec- tives and develop a mutually acceptable protocol for communication and conflict resolution through a formal agreement.

transmittal

A tracking document that serves as a cover notification to any communication, submit- tal, or shop drawing being transmitted among the project participants.

hold harmless

A type of indemnity clause that requires one party to fully protect the other from a claim asserted. This would include the payment of costs or attorney fees.

Request for Information (RFI)

A written request for clarification regarding the details presented in the plans or specifications. The requests are usually made by subcontractors through the general contractor to the architect.

Define Request for Information (RFI) and discuss it's function and process.

A written request for clarification regarding the details presented in the plans or specifications. The requests are usually made by subcontractors through the general contractor to the architect. Shall include a detailed written statement that indicates the specific drawings or specification in need of clarification and the nature of the clarification requested. specifications shall be identified by section number page and paragraph, can be made by a contractor concerning items not indicated on Drawing sor contained in Project Manual that is required to properly perform the work. Process for RFI's is long and cumbersome. (182)

weighted criteria matrix

An evaluation method used in best- value selection in which maximum point values are assessed for qualita- tive and price components of a pro- posal. Contract award is based upon the highest total points earned. (page 87)

5. Discuss the level of influence on cost vs. cost spent over the life of a project.

As you view the graph, consider the process of building a new home. It would be far less expensive to decide to add extra electrical outlets during the wall fram- ing stage than it would be to make that decision after the drywall was up and the walls were painted. It would be even more cost effective to make that decision while the plans were still on the drawing board. Early contractor involvement helps flush out deficiencies in the design.

Understand the different behavioral trait a person possesses and how understanding them will improve individual performance and team success.

C (controlled, procedural): Quality, Accuracy, Perfection To be 'right' Use of facts, data, history Withdraws - to think Standards / principles Facts, data D (controlled, expedient) : Results Control Uses Conflict Uses it as a tool to get results Objectives , results Immediate results S (Responsive, Procedural): Relationships Security Maintaining Harmony Avoid by agreement Personal goals Appreciation I (responsive, expedient): People To be liked Verbal skills Highly verbal in conflict Ability to take risks Approval and praise put people in the right spot. Put C as an estimator, or I and sales etc.

consideration

Consideration is an important element of construction contracts. It is the benefit that each party involved in the contract gets or expects to get from the deal. ... This needs to be done in order for consideration to provide a valid basis for a contract. This can sometimes be referred to as a "bargained-for-detriment."

6. Define and Discuss the advantages and disadvantages of design-bid-build.

Design Bid Build: A project delivery method in which the owner holds two separate contracts for design and construction. This method is often referred to as the traditional project delivery method. Pro: It's a tried and old method. It has worked reasonably well in the past. Con: The design team and contractor are separate entities. This can often lead to designs that aren't as buildable then if they went with the Design Build delivery method (SEE "PROCUREMENT" POWER POINT)

Define and Discuss the advantages and disadvantages of design-build:

Design build: A project delivery method in which there is only one contract between the owner and a design-build entity. The design-builder is responsible for both the design and the construction of the project. This method is often referred to as single-source project delivery. Advantages: This design method has the designer and builder working together, this will likely lead to a better, easier to build design. Allows for fast tracking, enabling projects to be completed faster than the Design Bid Build delivery method. The designer is more responsible for the buildability of a design because they work with the builders Disadvantages: Architects and engineers might not like pairing up with contractors due to the added risk. Some owners may be suspicious of the designer and builder working together, they think they may try and take advantage of the situation.

forward pass

Determines the early start date, early finish date, and overall project duration (253)

1. Identify and describe the elements of direct and indirect costs of a detailed bid estimate.

Direct cost: Goes into facility its self. -Direct Labor Cost of Activity = Labor Rate x Activity Duration -Activity Duration = Quantity / Labor Production Rate -Labor Production Rate = units of work produced by a person/crew in specified time (hr or day) Indirect cost: Indirect costs are costs that cannot be directly attributed to a specific project, e.g. management, general administration, rental and utility costs. In other words, indirect costs are those for activities or services that benefit more than one project. -Social Security Tax -Unemployment Tax -Workers Compensation Insurance -Public Liability and Property Damage Insurance -Fringe Benefits

what are the differences between an engineers estimate and a bid estimate done by a contractor ?

Engineers estimate: determines EXPECTED cost, assumes market rate not what the actual market rate is, doesn't use quotes (actual cost of items) contractors estimate: determines actual cost, uses detailed company data. knows construction methods used can get a better idea on cost, uses actual costs of materials and labor from sub-contractors

Experience Modification Rate, Incident Rate, required record keeping requirements, and reporting requirements.

Experience modification rate: Experience Modification Rate or EMR is a measurement that insurance companies use to decide how much a company will pay in premiums for workers compensation insurance. The lower the EMR of the firm, the less they will have to pay in premiums. It is used in the following formula that decides a company's Workers Compensation premium: (company's payroll / 100) * (Classification Rate)*(Experience Rate Modification). A companies EMR can by lowered by increased safety measures. This could mean more safety training on the job, or hiring a company that specializes in making the work place safer for advice on safety measures. Some factors that affect Experience Modification Rate are: years in the business, claim history, Industry claims, total premium, under deductible claims, employer size, frequency of claims, severity of claims, and duration of claims. While a severe claim will affect premiums, it won't have as much of a negative effect as multiple less sever claims. Multiple less severe claims usually means that a severe claim is on its way. Thus, the insurance company increases its rates to make up for the added risk. Incident Rate: Incident Rate is a measurement that is used to compare your company's safety to the safety of other companies. It is found by taking the total number of job related injuries and illnesses, multiplying them by 200,000 and dividing that sum by the total number of hours worked by all employees. This value is represented by the following mathematical expression: (total number of injuries and illnesses*200000) / (number of hours worked by all employees). The national average for incident rate among construction companies is 3.0. It is important to try to keep this number low, not only for safety reasons but economic ones as well. Through safe work practices, a contracting firm can increase their profitability through rebates from there insurance company. Record keeping/reporting requirements: https://www.osha.gov/recordkeeping/

single parameter estimates are:

Functional unit price estimates: Cost per parking space unit cost per square foot estimate: cost per square foot

pay if paid

GC does not need to pay sub in the case of an owner default

3. Identify and understand characteristics of the 4 major types of construction sectors.

Heavy civil: These projects are usually publicly funded and tend to last for a long time. Building miles of roads can take many years. It is not unusual for individuals involved in this sector of the market to move temporarily to where the project is located. There are also occasions when your work might require that you be located in isolated areas for long stretches of time. However, anyone intrigued by big machines, tractors, and excavators will be attracted to this sector. This sector of the market is the least affected by economic fluctuations and, therefore, can offer a reasonable measure of job stability., Commercial: This sector of the industry primarily addresses the needs of commerce, trade, and government and makes up about a third of the total construction market. This is the category that includes banks, schools, office buildings, hotels, shop- ping malls, religious facilities, baseball stadiums, theaters, universities, amusement parks, hospitals, courthouses, government buildings, and other facilities where people gather. These projects may range in size from a small medical office to large high-rise office buildings to state-of-the-art biotechnology facilities. The building costs are significantly higher than with residential construction, and the project duration is much longer. It is not uncommon for a commercial project to last three years or more. , residential: Whether the residential construction firm is a small mom-and-pop operation or a huge publicly owned enterprise, there are certain characteristics of this market that anyone contemplating a career in building should understand. Home building is personal. Your client is usually an individual family with individual personali- ties. This is probably not the sector for you if you are not a people person. Home buyers are spending their personal funds on these projects, and usually it is the single largest amount of money they have ever spent. As a construction manager, you will be directly involved with the owner on a regular basis. You will get to experience the full range of emotions and tempera- ments associated with the home-buying public. There is a great deal of personal service and hand-holding that will be required of you. Many construction profes- sionals delight in this aspect of the business, anxious to address every detail and concern that an owner might have regarding the building process, while others cringe at the thought of having to deal with someone at such an intimate level. Residential construction companies come in all sizes. Some limit their service area to a local market, others might expand operations regionally or nationally, Industrial: This sector of the industry deals with building huge facilities that take many years to complete. In some cases, a project may be under construction for as long as 5 to 10 years, and the possibility of the construction management team having to relocate is quite high. The funding for these projects is usually provided by pri- vate sources, and the contract amounts are generally large. There are many inter- national opportunities in industrial construction, and anyone seeking a chance to travel abroad will most likely find it within this sector. Having an interest in international business, international law, or even world politics could be an asset for anyone considering this sector. And, of course, fluency in a foreign language is always a plus. Sometimes industrial projects are located in remote areas, even to the point where modern conveniences are in short supply. Depending on the facility type, there may be requirements for high security clearance and government oversight. It is very important that the engineers and construction managers on these proj- ects work closely together because the consequences of poor communication can be serious

What is a BID estimate? Describe the components of a BID estimate and various considerations which impact each.

Its the contractor's estimation for the work they will perform. Components: Quantity Takeoff: the measurement of work to be performed through interpretation of the drawings and specifications, basically its counting or measuring the quantity of each item being estimated. The steps to quantity take off are: defining the work, precision, documentation, and being systematic. find the price of the items extend: calculate the total price for each item by multiplying quantity by unit price find the following: Material cost: found by multiplying material by unit price. you must take into account the source of the materials, the supply and demand of said materials (size and standards, timely delivery, relationship to the buyer and supplier) and where they came from (shipping standards, shipping handling costs, loss/damage in handling). Also take into account the quantities needed, the storage for materials, what government regulations are on them in the way of taxes, and the quality of materials (specification requirements, and inspection costs) Labor cost: found using historical data. One must take into account productivity (skills of laborers, project complexity, climate, quality of supervision, effect of learning curve) and labor rates (union, open shop, prevailing wage). There are two types of labor costs (direct labor: labor rate X duration, activity duration= quantity/labor production rate, labor production rate=units of work produced by a person/crew in specified time) and (indirect labor costs: takes into account: Social Security Tax -Unemployment Tax -Workers Compensation Insurance -Public Liability and Property Damage Insurance -Fringe Benefits) Equipment cost: take into account rented and leased equipment (cost per time period from rental company) that is found by (-Ownership costs (Fixed) -Operating costs (Variable), Overhead costs, Profit). some considerations for equipment costs are: cost of moving equipment to and from site, cost of erecting and dismantling equipment Analyze and add subcontracts: take into account the sub-contractors reputation, how competitive and accurate the bid is from sub-contractors, do the subs meet the pre-qualifications Add bonds and insurance required for project: required bonds for the project: performance bonds: ensure that the work will be completed by the surety per the contract if the contractor is unable, typically must be 100% of contract amount for public jobs, optional for private jobs, typically 1% of contract price. payment bonds: ensures that the owner will not be liable for labor or materials not paid by the contractor, for which the contractor has been paid, covers half of contract amount for public jobs, optional for private jobs, usually 1% of contract price. insurance: many times, specifications require insurance policies for a specific loss or liability on the project. Costs vary depending on requirements, but need to be included in bid, insurance beyond specific project requirements should be included in the overhead category. Add overhead cost: General overhead: Office rent, utilities, office supplies, communications, office insurance, taxes, licenses, dues and subscriptions, home office salaries (president, secretaries), advertising and marketing, shop supplies and tools (ex: -Average Annual Volume of Construction = $6,000,000 -Average Annual Cost of General Overhead = $400,000 • •General Overhead Chargeable to Project = ($400,000 / $6,000,000) x 100% = 6.67%) Job overhead: not directly involved in project. Maybe building a bridge to get to the project. Non-productive personal (super superintendents), job trailers, Add profit: charging the owner enough to make money after you pay expenses of building the project.

Define leadership and its components.

Leadership: setting direction, aligning with people, motivating and cope with change. leaders can manage self, and are: Honesty Forward Looking Competent Inspiring Intelligent Fair - minded Supportive Straightforward Dependable Cooperative Determined Imaginative Ambitious Courageous Caring Mature Loyal Self-Controlled Independent

litigation

Litigation is the process of engaging in or contesting legal action in court as a means of resolving a dispute. The court is able to enforce or determine one party's rights or obligations. Litigation is not uncommon in the construction industry because of its adversarial nature and the tendency for disputes to arise.

lump sum

Lump-sum contracts are the most common type of contract, especially for building construction. Under this arrangement, the contractor agrees to complete the work specified in the plans and specs for a single fixed amount of money. From the own- er's standpoint, this is probably one of the safest contracts because the cost is known up front. However, this is assuming that the plans and specs from which the con- tractor's estimates are made are accurate and complete. Once the contract is signed, both parties must live with the terms of the contract, and any flaws, errors, or omis- sions in the plans and specs will result in a change order. Change orders result in extra work and/or extra time, both of which result in extra cost to the owner. And although most owners are adamant about "no change orders" when they bid the job, it is completely unrealistic to assume that the contract documents will be flawless; change orders should always be anticipated for design-bid-build work utilizing a lump-sum contract. On the other hand, if there are cost overruns associated with the work that have nothing to do with errors or omissions in the design but instead are the result of poor management, rework, or even weather, then the contractor must suffer the loss with no additional compensation from the owner. Likewise, if superior performance by the construction management team results in a cost savings, then the contractor will solely benefit from that savings. Table 4.1 illustrates the various scenarios. Page 111 of text book

alternate

Mechanism used in Bid Documents to seek separate bids for a different design than the "Base Bid" design. May be "Additive" or "Deductive" alternates.

1. Identify major types of estimates, discuss when each type would occur during the life of a project, identify the likely person performing the estimate, and how accurate each type of estimate is likely to be. How much accuracy is good enough in regards to conceptual estimating?

Order of Magnitude: Used by contractor/project manager. Single Parameter estimates (uses historic data, ft x $ per foot) , and factor(multiply is by a multiplication factor) estimates are used. happens at planning is within 20-50% accurate. Preliminary: happens at design is within 15-25% accurate. could be done by contractor or owner. Schematic: happens at design is within 10-15% accurate, usually done by engineer Design Development: Happens during design stage is 5-10% accurate. Usually done by architect Engineers estimate: happens at design is withing 1-3% accurate done by engineers Contractors Bid: happens at procurement, is completely accurate relative to its self. done by contractor For the accuracy, knowing that a conceptual estimate is likely to be +/- 15-20% is good enough).

11. Describe the application for payment process and what items are included in the payment application.

Payment process: Requests for payment are made by the contractor to the owner via the architect on a monthly basis. The project manager or contract administrator is usually responsible for compiling the request. The payment request is due by a certain day each month, usually at the end of the month (for example, the 25th day of eachmonth). That means the project manager must determine a cutoff date (probably the 20th of each month) by which the project manager must receive all bills from subcontractors and vendors, and payroll data for self‐performed work, in order to meet the submittal deadline. After the payment request is submitted, the architect reviews the applica‐ tion and either recommends it for payment by the owner or sends it back to the contractor for revisions. You do not want a payment request returned. Even the simplest revision can result in a missed payment, and not many contractors can absorb the financial hit. However, if everything goes well, the contractor should receive payment by the 10th of the following month if the pay request is submit‐ ted by the end of the current month. Unfortunately, this is not always the case, and some owners are notoriously late with their payments. Consistently late pay‐ ments not only put a financial strain on the contractor but also put a real strain on the contractor‐owner relationship. Once the payment is received from the owner, the contractor is obligated to promptly pay their subcontractors and vendors. Many subcontractors run rela‐ tively small operations and cannot afford to wait longer than just a few days before receiving payment. In instances where the owner's payment to the con‐ tractor is delayed, it is important that the contractor go ahead and pay their sub‐ contractors and vendors anyway. Delaying payments to smaller subcontractors can add a significant burden to an already stretched payroll and end up damag‐ ing this very important working relationship. (186) Payment application: The application for payment is the final document needed to process a payment request. This form summarizes the actual payment amounts and provides the official approvals required before the payment can be released. The American Institute of Architects also publishes a standard application for payment form called an application and certificate for payment (AIA Form G702). This standard form is commonly used across the industry, although some projects may provide their own customized form. whats in the form: original contract sum, net change by change orders, contract sum to date, total completed to date, retainage, five percent of complete work, total earned less retainage, less previous payments, current payment due, signature by contractor and architect. (189)

pre-bid meeting

Prior to bidding, it is common for the owner and/or designer to conduct a pre-bid meeting. This meeting often occurs at the project site and provides an opportunity for the bidding contractors to get many of their questions answered. It is very important that each of the bidding contractors sends a representative to this meeting. The estimator is often the representative sent, simply because that is the person who is the one most familiar with the project at this stage and who has developed a query list after a thorough review of the plans and specs. Some projects require attendance at this meeting, and contractors who fail to attend are not allowed to bid.

quality control vs quality management/Quality assurance :

Quality control: about the inspection of work to ensure it meets the quality of standards specified in the contract Quality management/quality assurance: Management of systems employed by company to produce a high quality of work consistently

change order

Requests made by the owner to add features to or subtract features from the scope of the project resulting in changes to the contract

1. Describe teams, team member types, successful teams, and the importance of understanding various behavioral types.

Teams that work: have high levels of trust, respect, have a clear purpose, willing to resolve conflict, focus on results, have mutual responsibility and accountability. Team member types: sheep: fallow everyone else Yes: agree with everyone Alienated: Not apart of group, will turn on group Survivor: Will stab in back Effective: is a good team mate Importance of understanding behavioral types: put right behavioral types with each-other

prevailing wage/Davis Bacon

The Davis-Bacon Act of 1931 is a United States federal law that establishes the requirement for paying the local prevailing wages on public works projects for laborers and mechanics. or: The Davis-Bacon Act applies to all federal and federally assisted construction projects over $2,000. It requires that employees be paid a wage that is not less than the schedule of prevailing wages. Prevailing Wage is defined as the hourly wage, usual benefits and overtime, paid in the largest city in each county, to the majority of workers, laborers, and mechanics. Prevailing wages are established, by the Department of Labor & Industries, for each trade and occupation employed in the performance of public work

punch list

The minor adjustments, repairs, and work items that must be done before substantial completion can be achieved. The list is prepared jointly by the owner, architect, and contractor. The architect confirms completion of each item on the list.

competitive bid

The old adage is to get three prices on the work and award the job to the lowest bidder.

notice to proceed

The owner authorizes the contractor to begin work on a project on a particular day or as soon as possible. This notice is linked to the duration of the project.

substantial completion

The point at which all punch list work has been completed and the owner can occupy or take possession of the new facility.

Prequalification

The process in which an owner, based upon minimum financial, management, and other qualitative data, determines whether a construction firm is funda- mentally qualified to compete for a certain project or class of projects.

termination for cause

There are reasons for terminating a contract, and either party has the right to do so under certain conditions. This section deals with the conditions under which parties may terminate or suspend the contract.

• Cost plus fee

Under a cost-plus-fee contract (also referred to as time and materials), the owner reimburses the contractor for all actual costs associated with the work plus a fixed fee or percentage of the cost. This type of contract is often utilized in situ- ations where it is difficult to define the scope of the project accurately or when time is of the essence and construction needs to start before the full plans and specs are complete. For the contractor, this type of agreement guarantees a profit on the job regard- less of project cost. However, the owner is at significant risk under this arrangement because there is no limit set for the project cost, and the contractor really has no incentive for minimizing that cost. For this reason, it is very important that the owner clearly spells out up front exactly which costs will be reimbursed and which costs will be viewed as part of the contractor's fee. For example, labor, materials, equipment, and subcontracts are always reimbursed. But soft costs such as over- head and supervision may be disputed as reimbursable expenses.Another important consideration for both the owner and the contractor with a cost-plus-fee contract is the amount of paperwork involved. Each billing requires a full accounting of exact project costs with receipts. This adds a tremendous admin- istrative burden to both parties. The construction manager must prepare the bill, and the owner or architect must review and approve the bill. All of this extra work adds overhead expense on both sides and must be accounted for. Table 4.2 illus- trates this scenario for a $2,000,000 budget. Page 113

20. Discuss the current trends in dispute resolution. Understand/describe the various types of dispute resolution.

Types of dispute resolution: partnering: A team-building technique, calling upon the parties to the construction contract to establish a common set of project goals and objectives and develop a mutually acceptable protocol for communication and conflict resolution through a formal agreement. mediation: In mediation, an impartial third party (the mediator) facilitates the negotiation between the disputing parties. Sometimes it just takes a new set of eyes and ears in the room to be able to move the disagreement to a settlement. The objective is to assist the parties in coming to a mutually acceptable agreement. Obviously, this methodology is going to be less time‐consuming and less expensive than going to court. There are no attorneys involved, and the basis of resolution is still negotia‐ tion between the parties who are most familiar with the matter at hand. arbitration: The use of binding arbitration in lieu of litigation is often stipulated in the general conditions of the contract for construction. Arbitration is a more formal process and is generally more costly and time‐consuming than either a mediation or a minitrial, but it is less expensive than litigation. (Having participated in three arbitration cases, I can tell you that they are very costly and very time‐consuming indeed.) Although the arbitration method employs a neutral third party to preside over the proceedings, everything else about the process is quite similar to a tra‐ ditional trial. Each party is represented by an attorney, witnesses are called, and exhibits and evidence are presented. The preparation involved can take months, and the hearings themselves can go on for days. In the end, the arbitrator makes a ruling, and the decision is final. Although the process is indeed less demanding than a full‐blown trial, it is still an arduous exercise, and my recommendation would be to do whatever is necessary to settle the dispute before it ever gets to arbitration. Minitrial: Minitrials are one step up from mediation in terms of the amount of time and cost invested. A minitrial is conducted as an informal private process that com‐ bines aspects of both mediation and litigation. As in mediation, a neutral outside advisor is engaged; as in litigation, an attorney is employed to represent each of the parties. The unique element in the process is that an executive from each of the firms involved in the dispute is brought into the mix. Basically, the attorneys are charged with making an abbreviated case for each argument to the executives of the firms. In the best scenario, the executives are expected to come to a settlement after seeing all of the exhibits and hearing the evidence. If they can do that, fine; everyone shakes hands and goes home. If they are unable to come to an agreement, the third‐party neutral advisor may offer an opinion upon which the parties may or may not settle. The outcome of a minitrial is nonbinding, and therefore the dispute could still end up in litigation, although every effort should be made to avoid that project neutral: consultant who provides non-binding opinions or a mediator who facilitates the parties' negotiations, unlike an arbitrator, who makes decisions that bind the parties. litigation: the process of taking legal action.

primary insurance required on construction projects

Workmen's compensation and employers' liability insurance in compliance with state statues, minimum coverage 100,000 comprehensive general liability insurance: covers bodily injury in the minimum limits of 500,000 per occurrence. Comprehensive automobile liability insurance covering the operation of all automobiles used in connection with the performance of the contract in the minimum limits of 200000 per person and 500000 per occurrence for bodily injury and 20000 per occurrence for property damage.

no damage for delay

a clause contained in contracts which grants a party to the contract an extension of time but does not reimburse that party for any additional costs suffered during that time.

Cost plus percentage of costs

a method contractors often use to price services. This type of contract specifies that the buyer must pay all the project costs incurred by the seller, plus an additional amount for profit.

progress payment

a payment to the contractor that compensates the contractor for work performed up to a given date. Such payments generally are made monthly and are reduced by a given percentage that is retained by the owner until final completion

Cost Plus Fixed Fee

a specific type of contract wherein the contractor is paid for the normal expenses for a project, plus an additional fixed fee for their services. These allow the contractor to collect a profit on the project, and they encourage economic production in various industries.

Bid estimate

•Perform quantity takeoff for each type of item •Price items and "extend" (calculate total price for each item by multiplying quantity by unit price) -Material cost -Labor cost -Equipment cost •Analyze and add subcontract costs •Add bonds and insurance required for project •Add overhead cost •Add profit

18. Name and define the purpose of the 3 types of bonds.

Bid bond: Assures the owner that if the contractor is the low bidder, the contractor will indeed enter into a contract with the owner. However, if the low bidder simply cannot go forward with the contract, then the owner can award it to the second highest bidder with the surety stepping in to cover the difference between the two bids. performance bond: guarantee the performance of the contractor.•Ensures that the work will be completed by the surety per the contract if the contractor is unable •Typically must cover 100% of contract amount for public jobs •Optional for private jobs •Typically cost 1% of contract price payment bond: guarantee that people who provide labor and materials will be paid.•Ensures that the owner will not be liable for labor or materials not paid by the contractor, for which the contractor has been paid •Typically must cover 40-50% of contract amount for public jobs •Optional for private jobs •Typically cost 1% of contract price

14. List the items in a bid package and discuss the purpose of each.

Bid package: Documents available to contractor to use for bidding purposes: Plans and specifications: Instructions to bidders: specific instructions regarding the bidding process and goes into much more detail tan the invitation for bids (100) Proposal/bid form: Actual forms that need to be filled out when submitting the bid are included in this section of the manual. inludes information regarding the bid price, completion date, subcontractors, alternate pricing if requested, and receipt of addendum (101) General conditions: One of the most important documents associated with the contract for construction. Sets the ground rules for playing the game. responsablities of parties are clearly delineated, and the specific terms of the contract are defined in this section of the manual. (101) Supplementary/special conditions: Special conditions that are usually project specific. (103)

9. List and define a minimum of five items included in a notice (instructions) to bidders.

Bidding documents: How to obtain certain bidding documents qualifications of bidder: To demonstrate qualifications to perform the Work, each Bidder must be prepared to submit within five days of OWNER's request written evidence, such as financial data, previous experience, present commitments and other such data as may be called for below. Each Bid must contain evidence of Bidder's qualification to do business in the state of Texas or covenant to obtain such qualification prior to award of the contract. Exam of site: go to the site, examine it know what your up against Bonding Requirements: what is required of the contractor in regards to setting up a bond, as in the steops to finding a bonding company to pay the owner if things to heck Pre-bid conference: Prior to the date set for receiving bids, the Designer may arrange and conduct a Pre-Bid Conference for all prospective bidders. The purpose of this conference is to review project requirements and to respond to questions from prospective bidders and their subcontractors or material

16. Identify and describe the "formation" principles of a contract.

he general principles in the formation of a contract are Offer, I.T.L.R (Intention To create Legal Relations), Consideration, and Acceptance. A simple contract, that is a contract made not under seal, it requires an offer made by one party and accepted by other party, the valuable consideration given by either side, and a common intention that the agreement should be legally binding as well. An offer is expression or willingness to be bound of a term contract, it can be make one person (bilateral) or to a group of person or to the whole world at large (unilateral). (https://www.lawteacher.net/free-law-essays/contract-law/general-principles-in-formation-of-a-contract-law-contract-essay.php)

12. List the important items included in an advertisement for bid.

kind of job, location, owner, engineer, approx. size, place/cost of contract documents

critical path

longest path through a network diagram schedule and includes those activities that have zero days of float, determines the overall project duration. Shows earliest start and earliest finish.

Define and Discuss the advantages and disadvantages of construction management at risk contracts.

Construction management at risk: A project delivery method where the construction manager acts as a consultant to the owner in the develop- ment and design phases but as the equivalent of a general contractor during the construction phase. advantages: In one form of this delivery method, the construction management portion of the job is a separate entity from the general contractor. This can help avoid conflicts of interest. Direct dialogue between the design and construction team is possible, leading to more buildable designs and in effect waist less money. Disadvantages: The design and building team are working together, but aren't with the same company like with Design-Build. This means less cohesion, and more problems with building the project.

define engineers estimate and contractors bid estimate. what stage of construction do they occur ?

Engineers estimate: determines expected cost, assumes market rate, doesn't have any proprietary access to costs, assumes probable construction methods, actual quotes rarely used Contractors bid estimate: determines actual cost, uses detailed company cost data, knows construciton methods, uses actual sub-contractor bids and material quotes both occur at pre-construction

factors that impact project performance

Project control: Management tool vital to continued success in construction •Early detection of actual or potential performance issues provides an opportunity to fix them before they become disasters Quality: how well something performs, also, is it one time, safe, within budget, without claims and litigation ? productivity: factors that affect it: §Labor and equipment combinations §Weather §Constructability of the design §Length of the work day §Day shift vs. night shift §Efficiency of the tools and equipment §Effort expended by the labor force §Level of training of crews §Number of crews working in the same space §Government regulations Cash flow: its the budgeted cost of work scheduled. Cash requirements: represented by a smooth curve. more materials are gradually spent over life of project, most spend in center of project/curve. Income: monthly amount paid to contractor by owner. its a jagged line because it changes monthly. overdraft: have to pull out a lone because don't have money to spend on materials to build project. •BCWS - Budgeted Cost of Work Scheduled •BCWP - Budgeted Cost of Work Performed •ACWP - Actual Cost of Work Performed

guaranteed maximum price

The guaranteed maximum price (GMP) contract is a variation of the cost- plus-fee contract and has become very popular, particularly with owners using design-build project delivery. This contract contains the best features of the lump-sum and cost-plus-fee contracts (see Table 4.3). The guaranteed maximum price offers a firm cap on the overall contract price and at the same time stipu- lates that the owner is obligated to pay only actual costs plus a fee. Under this scenario, the owner is protected by the guarantee of a maximum price and yet receives the benefit of any realized savings. It also allows for an early start of construction because the pricing of the job can occur before plans and specs are 100 percent complete. page 113

Unit price

Unit-price contracts are used when the work to be performed cannot accurately be measured ahead of time. Unit pricing is common for heavy civil and highway- type projects. Even though engineered site plans and specs are prepared for this type of work, it is very difficult to make exact quantity estimates because the material you are working with is not something you can physically count off like bricks or steel beams. The material quantities are much more imprecise (such as dirt or the removal of dirt), and the work is often performed by large equipment such as bulldozers or backhoes instead of by installers such as electricians or carpenters. For this reason, the owner typically provides fixed quantities for the contrac- tors to apply their unit pricing to. This arrangement provides for a competitive bid situation via unit prices even though the exact quantities cannot be accurately determined from the plans and specs. For example, the owner could provide quanti- ties for excavation, pipe laying, and backfill. The contractor would quote a dollar amount per cubic yard for soil excavation, a dollar amount per linear foot of piping laid, and a dollar amount per cubic yard of backfill installed and come up with a total bid based upon the quantities that the owner provided. The risk to the owner under this contract method is obvious; see Table 4.4 for an illustration. If the owner's quantities vary greatly from the actual require- ments of the job, then the owner will be responsible for the additional costs. The final price for the project is not known until the work is complete. The only sure thing about this approach is that the unit costs for each item of work remain the same throughout the project. Page 114

unbalanced bidding

an unbalanced bid creates a lower tender price, increasing the chances of winning the contract: https://www.youtube.com/watch?v=naQOpwwjVcU

Systems estimates

based on number of systems to install

bid shopping

bid shopping is the practice of divulging a contractor's or subcontractor's bid to other prospective contractor(s) or subcontractor(s) before the award of a contract in order to secure a lower bid. Lowered bids may lead to cost cutting in the construction process, primarily in materials and labor, which may lower the quality of the work performed. https://www.youtube.com/watch?v=zbcQVjg1N_U

1. Identify the major steps of project development from lecture and put them in the correct order from the start of a project to the end.

concept, design, document, bid, start up, build, operate/maintain, demolish

17. Discuss the primary clauses found in the General Conditions component of a contract.

definitions of who the parties are: roles: Owner responsibilities: this section stipulates the information and services that the owner is required to supply. It also identifies the owner's right to stop the work and the owners right to carry out the work. Contractor responsibilities: lays out the obligations of the contractor regarding construction procedures and supervision of the work, labor and materials, warranty, taxes, permits, fees and notices, schedules, sample of the product data, and cleaning up. Payments and Completion: This section is very important because it identifies how the contractor will be paid. It specifies how applications for progress payments are to be made. It also deals with the withholding of payments and failure-to-pay issues. Changes in the Work: This section explains how changes are to be authorized and processed. This is a very important clause in the contract because changes in the work are one of the areas of greatest contention between the owner and the contractor. dispute resolution: Termination or Suspension of the Contract: There are reasons for terminating a contract, and either party has the right to do so under certain conditions. This section deals with the conditions under which parties may terminate or suspend the contract. Insurance and Bonds: This section deals with insurance and bonding requirements of the parties. review material on page 102

4. Identify at least two things that should be considered during the conceptual design phase of the project for each of the following categories: demographics, land, environmental issues, site access, zoning and building codes, financing, and political considerations.

demographics: population density, median age land: market area, land problems environmental issues: Climate, pollution (air water noise) site access: Vehicular access, pedestrian access Zoning and building codes: setbacks, water rights Financing: private building (capital investors, loans) Public: General tax revenue bonds (general obligation bonds revenue bonds) Political considerations: Image of location, traffic/congestion

backward pass

determines late start date and late finish date (253)

Understand and describe the importance of emotional intelligence in the work environment.

emotional intelligence is the capacity to understand and manage your emotions. ... Embracing the nuances of human emotion in the workplace can have pragmatic benefits, such as better collaboration among employees and a happier workplace, according to Rex Huppke.

Most common construction fatality

falls

what are ethics and why are the important in construction

guiding rules of behavior. people live in buildings.

15. Describe the selection methods: low bid, best value, and qualifications based.

low bid: The low-bid selection method is all about price, and it is still the most common way for contractors to get their work. It all starts with a set of contract documents. (Contract documents will be discussed in detail in Chapter 4, "The Construction Contract.") page 78 best value: Any selection process in which proposals contain both price and qualitative components and the award is based upon a combination of price and qualitative considerations. page 84 qualifications based: There are no limitations to using qualifications-based selection (QBS) for construc- tion in the private market. Basically, any private owner could decide to ask a number of contractors to compete on qualifications only. However, our society is so accus- tomed to low-bid selection for construction that QBS is not a common occurrence in the building industry, even though most architects and engineers have always been selected this way. page 88

read through and quiz self on "OPERATIONS" power point

mooms spaghetti

13. Identify several factors that influence the decision to bid a project.

page 90-91

Pay when paid

payment clause that states that the contractor is obligated to pay its subcontractors following receipt of payment from the owner. ... This means that payment by the owner triggers the timing of when the contractor must pay you.

21. describe what a preliminary estimate is, and list and describe preliminary estimating techniques and accuracy.

preliminary estimates provide a somewhat higher level of accuracy and may be used to establish initial budgets and preliminary financing scenarios. However, these estimates should never be used to commit to a contract price because too many factors can influence the reliability of the numbers. Single parameter estimates: Functional Unit Price Estimates (ROM) Parking Garages Cost per Parking Space Hospitals Cost per Bed Generating Station Cost per kilowatt of output Unit Cost per Square Foot Estimate Historic Data (Means, Dodge, Richardson, Walker's) ft2 x $/ ft2 = Total $ Unit Cost per Cubic Foot Estimate Factor or component ration estimates: Develops predominant cost Again, historic data (in-house) Component Cost = f (Predominant Cost) Factored Estimate: Type of Work Factor Projected Cost General Conditions 0.09 $ 54,000 Excavations 0.07 $ 42,000 Framing Equipment 0.22 $ 132,000 Equipment 1.00 $ 600,000 Process Piping 0.70 $ 420,000 $1,248,000 general accurateness of preliminary estimates is 15-25 % accurate and the purpose is planning

1. Be prepared to develop a network schedule, perform forward and backward passes to determine the duration and critical path.

read page 252

termination for convenience

termination for convenience clause is a clause in a construction contract that allows one or both parties to terminate the agreement without a specific reason for doing so (such as a default or breach of the contract)

float

the amount of leeway available to start or complete an individual schedule activity before it affects the planned project completion

• Cost plus fixed fee

the contractor is paid for the normal expenses for a project, plus an additional fixed fee for their services. These allow the contractor to collect a profit on the project, and they encourage economic production in various industries.

quantity takeoff

the measurement of work to be performed through interpretation of the drawings and specifications. Basically its counting or measuring the quantity of each item being estimated

2. Identify the three key participants in a project team, as well as at least two other project participants.

the owner, the designers (architects and engineers), and the contractor. secondary: building inspectors, subcontractors

8. Describe the 'site visit' component of preparing a bid and identify key items to consider when conducting a site visit.

the site visit: No one should ever estimate a job without first visiting the job site. There are site conditions that just cannot be understood by merely looking at the plans and specs. Only by walking around will you get a good sense of the lay of the land, which will help you make the necessary judgment calls that ultimately affect your pricing. Even if the site visit is not part of the prebid meeting, it is your obli- gation to make every effort to mitigate risks associated with the bid. Visiting the site is one way in which you can mitigate those risks. Key items to consider: Distance from office Site conditions Site access Soil data Groundwater Security needs Traffic considerations Adjacent structures Possible contamination Water, electricity, and telephone service

bid withdrawal

we screwed up the work, so Bids may be modified or withdrawn by written notice or in person by a bidder if the request is received prior to the exact hour and date set for the bid opening. Requests for withdrawals or modifications of bids received after the bid opening will not be considered except as otherwise provided in the following paragraph.

negotiated bid

when an owner negotiates a price for services rendered with a single contractor. In this method, contractors do not compete against each other for the lowest possible price and owners are not provided comparative pricing.

19. Name and define the purpose of workers' compensation, builders risk, and general liability insurance.

workers' compensation: Injured employees receive a certain portion of their wages while they are off work for the treatment of such injury or illness, depending on state rules. States also establish their own rate of compensation when an employee loses a member, is permanently disabled or dies as a result of the work-related accident. builders risk: Builders risk is a specialized type of property insurance designed for buildings under construction. Also known as "course of construction" insurance, builders risk coverage begins on the policy effective date and ends when the work is completed and the property is ready for use or occupancy. Because every construction project is different, no two builders risk policies are alike. Generally, however, most builders risk policies cover property losses due to fire, lightning, hail, explosions, hurricanes, theft, vandalism and many other risks. Earthquake, flood and wind in beach zones are usually excluded, but coverage extensions may be purchased for projects in locations that are vulnerable to these types of risks. Other standard exclusions include ordinary wear and tear, acts of terrorism and war, employee theft, rust and corrosion, mechanical breakdowns, and damage resulting from faulty design, planning, workmanship and materials. link: https://www.thehartford.com/resources/construction/understanding-builders-risk-insurance general liability insurance: Also known as business liability insurance, general liability insurance protects you and your business from "general" claims involving bodily injuries and property damage. Almost every business has a need for general liability insurance https://www.nationwide.com/lc/resources/small-business/articles/what-is-general-liability-insurance

perform a single parameter estimate

•Unit Cost per Square Foot Estimate -Historic Data (Means, Dodge, Richardson, Walker's) -ft2 As a GC (general contractor) you perform the following items on a job: general conditions, sitework, excavation, foundation, and concrete. Given the parameter measures and project data below, develop a parametric estimate for your portion of the work. Parameter Measures 1. Gross enclosed floor area 500,000 sf 2. Gross area supported (-slab on grade) 450,000 sf 3. Total Basement floor area 35,000 sf Project Data Trade Parameter Cost ($) General Conditions 1 sf 4.15 Sitework 1 sf 1.50 Excavation 3 sf 6.75 Foundation 2 sf 1.90 Concrete2sf3.25