CONSTRUCTION MANAGEMENT

Bid

A binding offer, usually expressed in dollars to provide specific services within clearly stated requirements.

General Contractor

A business entity that provides independent contractor services to owners through the use of subcontractors when using the general contracting system.

Prime Contract

A contract held by an owner.

Design-Build (D-B) Contracting

A contract structure where both design and construction responsibility are vested in a single contractor.

Design-Build (D-B) Contractor

A contractor that provides design and construction services under a single responsibility contract to an owner .

Subcontractor

A contractor who has a contract with a prime contractor.

Sub-subcontractor

A contractor who has a contract with a subcontractor.

Construction Manager

A firm or business organization with the expertise and resources to manage the design, contracting, and construction aspects of project delivery. Individuals who work for a CM Firm are also referred to as Construction Managers.

Lump Sum Fee

A fixed dollar amount which includes all costs of services including overhead and profit.

Guaranteed Maximum Price CM (GMPCM)

A form of the CM system where the construction manager guarantees, in addition to providing ACM services, a ceiling price to the owner for the cost of construction.

Claim

A formal notice sent by a contractor to an owner asserting the fact that the terms of the contract have been breached and compensation is being sought by the contractor from the owner.

Superintendent

A job title usually reserved for the administrative level person who supervises the work of an on-site contractor .

Project Meeting

A meeting dedicated essentially to contractor performance and progress payments, involving supervisors from contractor home offices and the team's Level 2 and 3 Managers.

Owner's Representative

A person assigned to a project to represent the owner on the project team at one to the three management levels.

Bid Depository

A physical location where trade contractor proposals are fled the day before general contractor bids are to be received by an owner for pickup, opening, acceptance, or rejection by general contractors bidding the owner's project.

Bid Bond

A pledge from a third party (usually a surety company) to pay liquidated damages to the owner to the extent of the difference between the bonded contractor bid and the next highest bidder but not to exceed the face value of the bond; if the bonded contractor declines an award offered by the owner.

Construction Management

A professional service that applies effective management techniques to the planning, design, and construction of a project form inception to completion for the purpose of controlling time, cost and quality. (As approved by CMAA) OR A project delivery system that uses a construction manager to facilitate the design and construction of a project.

Milestone Schedule

A schedule of milestones spanning from the start of construction to occupancy, used as the main measure of progress to keep the project on schedule.

Value Engineering

A technical review process; the close matching of engineering design to the value an owner derives from the design.

Preconstruction Phase

All required phases prior to the start of construction.

Chart of Accounts

Also: Account Codes; Codes of Accounts An alpha/numeric identification system for budget line items that ensures that project expenditures are properly debited/credited in the project budget as payments are made in behalf of the project.

As-Built Drawings

Also: As Builts; Check: Record Drawings Drawings produced during or after construction and amended to show the exact location, geometry, and dimensions of the constructed project. As-Built Drawings are not the same as Record Drawings.

Changed Conditions

Also: Concealed Conditions; Latent Conditions Conditions or circumstances, physical or otherwise, which surface after a contract has been signed and which alter the circumstances or conditions on which the contract is based.

Project Team

Also: Construction Team; Check: Program Team Consists of the architect/engineer, construction manager, and owner, represented by their Level 1, 2, and 3 Persons, plus the designated leaders of contracted constructors.

Change Order

Also: Contract Modification The document that alters the contract amount, contract time, or contract requirements of the original contract entered into by the owner and a contractor.

Construction Schedule

Also: Detailed Construction Schedule A graphic, tabular or narrative representation or depiction of the construction portion of the project- delivery process, showing activities and durations or activities in sequential order.

Professional Liability Insurance

Also: Errors and Omissions Insurance Insurance provided by design professionals and construction managers that protects the owner against the financial results of negligent acts by the insured.

Pre-design Phase

Also: Feasibility Phase The phase prior to the start of design.

Field Construction Manager

Also: Field CM; Level 3 Manager; Level 3 Person; Superintendent, Site Manager A person designated by the CM firm to interface with the owner's and A/E's representatives on the project team at the third management level. A person located at the site and charged to administer the procedures established by the team's Level 2 Manager for the construction of the project.

Warranty

Also: Guarantee Assurance by a providing party that the work, material, and equipment under warranty will perform as promised or as required by contract.

Lien

Also: Mechanic's Lien The right to take, hold, or sell the property of a debtor as security or payment for a debt.

Completion Schedule

Also: Occupancy Schedule A schedule of the activities and events required to effect occupancy or the use of a facility for its intended purpose. It is used to determine if construction progress will meet the occupancy date.

Shop Drawings

Also: Product Data; Samples Detailed information provided by material and equipment suppliers demonstrating that the item provided meets the requirements of the contract documents.

Reimbursable Expense

Also: Reimbursable Charges to the owner covering costs for services that could not or intentionally were not quantified at the time the fee arrangement was made.

Progress Meeting

Also: Site Coordination Meeting, Coordination meeting A meeting dedicated essentially to contractor progress during the construction phase.

Special Conditions

Also: Supplementary Conditions Amendments to the General Conditions that change standard requirements to unique requirements, appropriate for a specific project.

Occupancy Phase

Also: Warranty/Guarantee Phase; Warranty Phase; Guarantee Phase A stipulated length of time following the construction phase, during which contractors are bonded to ensure that materials, equipment, and workmanship meet the requirements of their contracts, and that supplier- and manufacturer-provided warranties and guarantees remain in force.

Guarantee

An agreement by which a party accepts responsibility for fulfilling an obligation.

Budget Estimate

An estimate of cost based on rough or incomplete information, with a stated degree of accuracy. The more information available, the more accurate the estimate. Loosely called a "ballpark" estimate.

Estimated Cost to Complete

An estimate of the cost still to be expended on a work-scope in order to complete it. The difference between the Cost to Date and the Estimated Final Cost.

Estimated Final Cost

An estimate of the final cost of a work item based on its Cost to Date and the estimated cost to complete it. The sum of the Cost to Date and the Estimated Cost to Complete.

Clerk-of-the-Work

An individual employed by an owner to represent him on a project at the site of the work. The clerk-of- the-work's abilities, credentials, and responsibilities vary at the discretion of the owner.

Preliminary Design Phase

Applies to engineering projects; the initial design effort following signing of the owner; engineer agreement. It is followed by the Final Design Phase.

Approved Changes

Changes of any nature in contract requirements which have been agreed upon through a change approval process and approved by the owner.

Record Drawings

Check: As-Built Drawings A set of contract document drawings, marked up as construction proceeds, which show the exact location, geometry, and dimensions of all elements of the constructed project as installed.

Project Manual

Check: CM Project Manual Written information that augments the drawings. The Project Manual contains the General Conditions, Supplementary and Special Conditions, the Form of Contract, Addenda, Change Orders, Bidding Information and Proposal Forms as appropriate, and the Technical Specifications.

Start-Up

Check: Commissioning; Beneficial Occupancy The period prior to owner occupancy when mechanical, electrical, and other systems are activated and the owner's operating and maintenance staff are instructed in their use.

Performance Bond

Check: Labor and Material Bond; Surety A guarantee provided by a surety to complete a project according to the terms of the contract documents in the event that the bonded contractor defaults on the contract or to pay the owner the face value of the bonded amount.

Notice of Award

Check: Letter of Intent; Notice to Proceed A letter from an owner to a contractor stating that a contract has been awarded to the contractor and a contract will be forthcoming.

Notice to Proceed

Check: Notice of Award; Letter of Intent A notice from an owner directing a contractor to begin work on a contract, subject to specific stated conditions.

Letter of Intent

Check: Notice of Award; Notice to Proceed A notice from an owner to a contractor stating that a contract will be awarded to the contractor providing certain events occur or specific conditions are met by the contractor.

Labor and Material Bond

Check: Surety; Performance Bond A guarantee provided by a surety to pay claims against the owner from contractors and suppliers who have not been paid for labor, material, and equipment incorporated into the project.

Direct Material Costs

Costs accruing from expended labor excluding the bonus portion of overtime, insurances, and payroll taxes.

Specifications

Detailed statements covering procedures, and quantitative and qualitative and qualitative information pertaining to material, products, and equipment to be incorporated into a project.

Construction Documents

Drawings, technical specification, and addenda; the contract documents that refer to the physical construction requirements established by the A/E.

Drawings

Graphic representations showing location, geometry, and dimensions of a project or its elements in sufficient detail to facilitate construction.

Contingencies

Line-item amounts in the project budget, dedicated to specific cost areas where oversight is an inherent problem in project delivery.

Long-Lead Items

Material and equipment required for construction which have delivery dates too far in the future to be included in a contractor's contract at bid time. They are pre-purchased directly by the owner.

Escrow Account

Money put into the custody of the third party by the first party for disbursement tot the second party. A brief temporary depository for progress payments until authorized for release according to the depositor's explicit instructions.

Progress Payment

Partial payments on a contractor's contract amount, periodically paid by the owner for work accomplished by the contractor to date.

General Conditions (of the Contract for Construction)

See: Front-End Specifications The part of the contract that prescribes the rights, responsibilities, and relationships of the parties signing the agreement and outlines the administration of the contract for construction.

Commissioning

See: Start-up; Beneficial Occupancy The process at or near construction completion when a facility is tried out (put into use) to see if it functions as designed. Usually applied to manufacturing type projects.

Milestone

Selected strategic events of signal importance to progress used in the milestone schedule.

Contract Administration

Servicing the interactive provisions in the contracts for construction between the owner and the contractor(s).

Conditions of the Contract

Term that refers to the General Conditions and the Supplementary and Special Conditions of the contract for construction.

Apparent Low Bidder

The bidder who has submitted the lowest competitive proposal as determined by a cursory examination of the bids submitted.

Schedule of Values

The breakdown of a lump sum price into sub-items and sub-costs for identifiable construction elements, which can be evaluated by examination for contractor progress payment purposes.

Critical Path(s)

The continuous chain(s) of activities from project-start to project-finish, whose durations cannot be exceeded if the project is to be completed on the project-finish date. A sequence of activities that collectively require the longest duration to complete (the duration of the sequence is the shortest possible time from the start event to the finish event).

Life-Cycle Cost

The cost of purchasing, installing, owning, operating, and maintaining a construction element over the life of the facility.

Direct Costs

The costs directly attributed to a work-scope, such as labor, material, equipment, and subcontracts but not he cost of operations overhead and the labor, material, equipment, and subcontracts expended in support of the undertaking.

Direct Labor Costs

The costs directly attributed to a work-scope, such as labor, material, equipment, and subcontracts but not he cost of operations overhead and the labor, material, equipment, and subcontracts expended in support of the undertaking.

Substantial Completion

The date on which a contractor reaches a point of completion, when subsequent interfacing contractors can productively begin work or the owner can occupy the project, in whole or in part, without undo interference.

Final Design Phase

The designation used by engineers for the last portion of the design process prior to bidding.

Contract Documents

The documents which collectively form the contract between the contractor and the owner. They consist of the bidding documents less bidding information plus pre-award addenda and post-award Change Orders.

Contract Document Phase

The final phase of design on an architectural project when construction documents are completed and bidding documents formulated.

Schematic Design Phase

The initial Design Phase on an architectural project when the A/E delineates the owner's needs in a general way.

Approved Bidders List

The list of contractors that have survived prequalification tests.

Final Completion

The point at which both parties to a contract declare the other has satisfactorily completed its responsibilities under the contract.

Fast-Track(ing)

The process of designing portions of a project while portions already designed are under construction. A series of controlled design-build sequences that collectively constitute a complete project.

CM Services

The scope of services provided by a construction manager and available to owners in whole or in part. CM services are not consistent in scope or performance from one CM firm to another.

RFP (Request For Proposal)

The second request for uniform detailed information from prospective CM practitioners being screened for a project.

Construction Budget

The target cost figure covering the construction phase of a project. It includes the cost of contracts with trade contractors, construction support items other purchased labor, material and equipment, and the construction manager's cost but not the cost of land, A/E fees, or consultant fees.

Project Budget

The target cost of the project established by the owner and agreed to be achievable by the team. The Project Budget usually includes the cost of construction and the CM fee, plus any other line-item costs (land, legal fees, interest, design fees, CM fees, etc.) that the owner wishes to have included in the budget.

Design Development Phase

The term used on architectural projects to describe the transitional phase from the Schematic Phase to the Contract Document during design.

Checks and Balances

The term used to describe the use of the overlapping expertise of each team member during team decision making.

Long-Lead Time

The time between the purchase date and delivery date of long-lead items.

Lump Sum Fee

The time between the purchase date and delivery date of long-lead items.

Technical Specifications

Written criteria that augment the drawings pertaining to the technical construction of the project that cannot be conveniently included on the plans.