PROJECT

OBJECTIVES / CM
ORGANIZATIONAL
Technological University of the
RELATIONSHIPS
Philippines
COLLEGE OF ARCHITECTURE
AND FINE ARTS
AGUSTIN, JERICHO
Ayala Boulevard cor. San Marcelino St.

NAZARENO, AIRAND
THOMAS
Ermita, Manila

Telephone no: 302 7750/ Loc. 301-305

PADEL,TUP
LEEN
ABIGAIL
website:
http://www.tup.edu.ph
REGALARIO, LYNDON
TUBAN, JOHN VINCENT

2.01 Defining project goals and objectives

2.01.01 Project definitions involves the discovery of to identify and analyze requirements and constraints

A project is temporary in that it has a defined beginning and end in time, and therefore defined scope and
resources.

A project is an individual or collaborative enterprise that is carefully planned and designed to achieve a
particular aim.

A project is a planned set of interrelated tasks to be executed over a fixed period and within certain cost and
other limitations.

And a project is unique in that it is not a routine operation, but a specific set of operations designed to accomplish
a singular goal. So a project team often includes people who dont usually work together sometimes from different
organizations and across multiple geographies.

Project Goal
A goal is much broader than objectives and activities. Keep the following in mind when defining your goals:
A goal should be

-the big picture of what you want the final outcome to be.
-related to the project need statement.
-simply stated.

Objective
An objective is a performance measure that would lead to achieving the goal. An objective should be specific,
concrete, measureable, and time-framed. A goal may have a few or several objectives.
Keep in mind the following when developing objectives:

Who/What?
Expected outcomes (results of activities)
Measures
Criteria for achieving the expected outcomes
Timeframe

2.01.02 Identify time and cost of delivering the project

For the later stages of a project, contract types are used to encourage better construction management services.
The preceding types of contracts for construction management service are used according to gross estimates and
complexity of work.
a. Firm Fixed Price The Owner will pay the Construction Manager a fixed fee. The fee will be unaffected by variations between
the estimate and the bids or by change orders during the construction phase unless the owners initiates an increase
in scope.
b. Fixed Price Incentive The Owner will pay the construction Manager a fixed fee which is adjusted according to the difference
between the final allowable costs and the target costs.
c. Cost plus Incentive Fee (CPIF) or Cost Plus Adjusted Fee (CPAF)
Cost reimbursement type contracts with provisions for a fee that is adjusted by "sharing" formulas applied
to the difference between the final allowable costs and the target costs.
d. Cost Plus Fixed FeeThe Owner will pay the Construction Management a fixed fee plus reimbursement of certain expenses
incurred in the performance of basic services.
Excellence in Project Management is achieved through a structured process that includes multiple phases:

Initiating
Planning
Executing
Monitoring and Controlling
Closing.

The process balances the key project constraints and provides a tool for making decisions throughout the project
based on stakeholder values, performance metrics, established procedures and project goals.
Effective project management includes strategies, tactics, and tools for managing the design and construction
delivery processes and for controlling key factors to ensure the client
receives a facility that matches their expectations and functions as it is
intended to function. Improvements in building quality directly contribute to
reduced operational costs and increased satisfaction for all of the
stakeholders. Successful project delivery requires the implementation of
management systems that will control changes in the key factors of scope,
schedule, budget, resources, and risk to optimize quality and, therefore,
the investment. This section offers guidance for the entire team to
successfully and effectively optimize the quality of a high-performance
building project.
It is critical to establish the qualities of the project that are necessary to
satisfy client and end user needs and expectations, once it is delivered and
in use. Value for the money in construction requires completing a project on
time, on budget and to a level of functionality that meets the determined
needs. A well-programmed project will continue to provide value and meet
user needs throughout its lifetime and will contribute positively to the
environment in which it is located with a wide range of social and economic benefits. Early investment
in planning, programming, and design can help deliver these benefits and avoid unnecessary costs and delays.
Contemporary institutions and organizations are increasingly realizing that traditional forms of managementbased
on the same approach to every projectcannot meet the needs of today's economic, social, and business
environment. Additionally, the processes can be streamlined based on technologies and efficiencies not previously
available. The responsibility for delivering a project as planned rests with the entire team. When evaluating options,
the whole-life value should be considered and not limited to the short term initial investment. Factors that affect the
longer term costs of a facility, such as maintainability, useful service life, and resource consumption should be
integrated into the decision matrix.
Project Delivery TeamsHow to assemble and effectively manage the project team.
Risk ManagementProvides details on how risk analysis is used as an organized method of identifying and
measuring risk.

Building Commissioningprovides an overview of commissioning drivers, benefits, goals, and principles for
improving building quality.
Project Requirements
Project inception and preliminary planning require thoughtful definition of goals and needs (Project Scope); master
planning to accommodate anticipated future needs; evaluation of project alternatives; identification of site
requirements; funding requirements; budget authorization cycles and/or financial impacts; and project phasing.
There are tools available that help define the goals and objectives for the project that let all stakeholders have a
voice in making the project successful. The risks associated with making mistakes in this part of the process are
great, since their impact will be felt across the project development process and in the final project results. For
more information, see links below in the Major Resources section.

Scope Management
It is primarily concerned with defining and controlling what is or is not included in the project.
Project scope is the part of project planning that involves determining and documenting a list of specific project
goals, deliverables, tasks and deadlines.
Product scope are the features and functions that characterize a product, service, or result.
Project scope is the work that must be performed to meet a client's program goals for space, function, features,
impact, and level of quality. Scope management sets the boundaries for the project and is the foundation on which
the other project elements are built. From the beginning it helps identify the work tasks and their requirements for
completion. Effective scope management requires accurate definition of a client's requirements in the Planning and
Development stage and a systematic process for monitoring and managing all the factors that may impact or
change the program requirements throughout the project design and construction phases through delivery of the
finished project.
Processes of Scope Management

Initiationcommitting the organization to begin the next phase of the project.

Scope Planningdeveloping a written scope statement as the basis for future project decisions.
Scope Definitionsubdividing the major project deliverables into smaller, more manageable
components.
Scope Verificationformalizing acceptance of the project scope.
Scope Change Controlcontrolling changes to project scope.

Quality Management
The act of overseeing all activities and tasks needed to maintain a desired level of excellence. This includes
creating and implementing quality planning and assurance, as well as quality control and quality improvement. It is
also referred to as total quality management (TQM).
Quality Management Principle

Principle 1 Customer focus - Organizations depend on their customers and therefore should
understand current and future customer needs, should meet customer requirements and strive to
exceed customer expectations.
Principle 2 Leadership - Leaders establish unity of purpose and direction of the organization.
They should create and maintain the internal environment in which people can become fully
involved in achieving the organizations objectives.
Principle 3 Involvement of people - People at all levels are the essence of an organization
and their full involvement enables their abilities to be used for the organizations benefit.
Principle 4 Process approach - A desired result is achieved more efficiently when activities
and related resources are managed as a process.
Principle 5 System approach to management - Identifying, understanding and managing
interrelated processes as a system contributes to the organizations effectiveness and efficiency
in achieving its objectives.

Principle 6 Continual improvement - Continual improvement of the organizations overall

performance should be a permanent objective of the organization.
Principle 7 Factual approach to decision making - Effective decisions are based on the
analysis of data and information
Principle 8 Mutually beneficial supplier relationships - An organization and its suppliers
are interdependent and a mutually beneficial relationship enhances the ability of both to create
value

Schedule Management
The project schedule is the tool that communicates what work needs to be performed, which resources of the
organization will perform the work and the timeframes in which that work needs to be performed. The project
schedule should reflect all of the work associated with delivering the project on time. Without a full and complete
schedule, the project manager will be unable to communicate the complete effort, in terms of cost and resources,
necessary to deliver the project.
A project schedule defines the processes and establishes a timeline for delivering the project. Avoiding missing
deadlines for delivery of key project components is a key objective of schedule management. Comprehensive
project schedules will identify all of the project's stages, phases, and activities assigned to each team member
mapping them to a timeline that measures key dates that are used to keep track of work progress. Schedule
management interfaces directly with scope, cost, and quality optimization and team member roles and activities
must be defined, coordinated, and continually monitored. It is the goal of every project manager to look for
efficiencies in all of these areas as a project progresses.
Work Breakdown Structure (WBS)

The building blocks of a schedule start with a Work Breakdown Structure (WBS). The WBS is a
hierarchical reflection of all the work in the project in terms of deliverables. In order to produce
these deliverables, work must be performed.

A typical approach in developing a WBS is to start at the highest level, with the product of the
project. For example, you are assigned as the project manager of a New Product Development
project. The new product you are developing is a new toy for children age's five trough nine. The
objective of this product development project is to increase the revenue of the organization by ten
percent.

Cost/Budget Management
Project Cost Management includes the processes required to ensure that the project is completed within the
approved budget
Project costs are measured and analyzed in many ways throughout a project, from planning, programming and
design to bidding, construction, turnover, and post occupancy. First costs, cost-benefit ratios, and life-cycle
costing are a few examples of how a project's cost-effectiveness can be evaluated. The control of costs requires
continual and systematic cost management and monitoring to compare actual costs incurred against targeted
budget numbers. These cost management processes start with the establishment of budgets based on actual
estimates for related work. They need to align with scope and quality requirements and be based on realistic,
current market conditions. Comparing budgets to actual costs throughout the building process is critical. The
process continues with milestone estimates, value engineering, procurement strategies, and change order
management to ensure the project is timely and cost-effective.
Cost Management Processes

Resource Planningdetermining what resources (people, equipment, materials) and what quantities
of each should be used to perform project activities.

Cost Estimatingdeveloping an approximation (estimate) of the costs of the resources needed to

complete project activities.

Cost Budgetingallocating the overall cost estimate to individual work items.

Cost Controlcontrolling changes to the project budget.

Resource Management
Resource Management identifies the quantity of labor, equipment and materials needed to deliver your project.
Resources are required to carry out the project tasks. They can be people, equipment, facilities, funding, or
anything else capable of definition (usually other than labor) required for the completion of a project activity. The
lack of a resource will therefore be a constraint on the completion of the project activity. Resources may be storable
or non-storable. Storable resources remain available unless depleted by usage, and may be replenished by project
tasks which produce them. Non-storable resources must be renewed for each time period, even if not utilized in
previous time periods.

Risk Management
Risk Management is the identification, assessment, and prioritization of risks followed by coordinated
and economical application of resources to minimize, monitor, and control the probability and/or impact of
unfortunate events or to maximize the realization of opportunities.
Project Management Plans
A Project Management Plan (PMP) documents key management and oversight tasks and is updated throughout the
project as changes occur. The plan includes definition of an owner's program goals, technical requirements,
schedules, resources, budgets, and management programs. It also provides a vehicle for including efficiencies in
the design and construction phases of all buildings. It will also serve as the basis for completed construction
documents and outline the commissioning plan for finished execution.

2.2 Construction Management (CM) Organizational Relationship

Typically the construction industry includes three parties: an owner a designer (architect or
engineer) the builder (typically a general contractor.) Traditionally, there are two contracts
between these parties. The first contract is the owner-designer contract, which involves
planning, design, and construction administration. The second contract is the owner-contractor
contract, which involves construction. An indirect, third-party relationship exists between the
designer and the contractor due to these two contracts.
A better business model replaces the traditional relationship with a blended team:
-

owner-designer
owner-builder, and
owner-construction project manager (CPM)

What is construction management or CM?

-

The firm that is responsible for managing the construction.

Construction management or construction project management (CPM) is the overall

planning, coordination, and control of a project from beginning to completion.

CM is aimed at meeting a client's requirement in order to produce a functionally and

financially viable project. The construction industry is composed of five sectors:
residential, commercial, and heavy civil, industrial, and environmental. A construction
manager holds the same responsibilities and completes the same processes in each sector.
All that separates a construction manager in one sector from one in another is the
knowledge of the construction site. This may include different types of equipment,
materials, subcontractors, and possibly locations.

Agricultural: Typically economical buildings, and other improvements, for agricultural purposes.
Examples include barns, equipment and animal sheds, specialized fencing, storage silos and elevators, and
water supply and drains such as wells, tanks, and ditches.

Residential: Residential construction includes houses, apartments, townhouses, and other smaller, lowrise housing types.

Commercial: This refers to construction for the needs of private commerce, trade, and services. Examples
include office buildings, "big box" stores, shopping centers and malls, warehouses, banks, theaters, casinos,
resorts, golf courses, and larger residential structures such as high-rise hotels and condominiums.

Institutional: This category is for the needs of government and other public organizations. Examples
include schools, fire and police stations, libraries, museums, dormitories, research buildings, hospitals,
transportation terminals, some military facilities, and governmental buildings.

Industrial: Buildings and other constructed items used for storage and product production, including
chemical and power plants, steel mills, oil refineries and platforms, manufacturing plants, pipelines, and
seaports.

Heavy civil: The construction of transportation infrastructure such as roads, bridges, railroads, tunnels,
airports, and fortified military facilities. Dams are also included, but most other water-related infrastructure is
considered environmental.

Environmental: Environmental construction was part of heavy civil, but is now separate, dealing with
projects that improve the environment. Some examples are water and wastewater treatment plants, sanitary
and storm sewers, solid waste management, and air pollution control.

The functions of construction management typically include the following:

1. Specifying project objectives and plans including delineation of scope, budgeting, scheduling,
setting performance requirements, and selecting project participants.
2. Maximizing the resource efficiency through procurement of labor, materials and equipment.
3. Implementing various operations through proper coordination and control of planning, design,
estimating, contracting and construction in the entire process.
4. Developing effective communications and mechanisms for resolving conflicts.
Construction management jobs
Project executive

Office engineer

Lead estimator

Project manager

Quantity surveyor

Senior estimator

Planning engineer

Project engineer

Chief estimator

Project coordinator

Area superintendent

Site Manager

Design manager

Project superintendent

Field engineer

Estimator

2.2.1

CM agent to owner

CONTRACTOR
A contractor is assigned to a construction project once the design has been completed by
the person or is still in progress. This is done by going through a bidding process with
different contractors. The contractor is selected by using one of three common selection
methods:

2.2.2

low-bid selection
best-value selection, or
qualifications-based selection

Main role of a
contractor

CM at risk

The CM is either:

1. A pure Construction Manager, (CM Not At-Risk), or

2. A Construction Manager At-Risk, (CM At-Risk).
Simply stated, the CM is either at risk, or not. (All other variations of CM are just slight
modifications of the responsibilities and expectations of the CM and do not change this fundamental
separation into these two categories.

Management vs. Delivery

Is the CM Not At-Risk (CM Agency) a project delivery method?
If the delivery you are referring to is the delivery of design and construction services, CM Not At- Risk
is not a project delivery method! Instead, CM Not At-Risk is a project management (vs. delivery)
method, a method of managing design and construction services.
Therefore, a CM Agency or Not At-Risk could be used in conjunction with any project delivery
method including Design-Bid-Build, Multiple Prime, Design-Build, or even CM At-Risk!

CM Not At-Risk (Agency) is not a project delivery method. CM Not At-Risk is

a project management method, a method of managing (vs. delivering) design and
construction services.
As illustrated in Figure 1, the CM is either up in the Owners corner of the triangle managing
the construction process, or he is in the Contractors corner of the triangle delivering construction
services.
Figure 1 also shows the three primary parties comprising the design and construction
process the Owner, the Architect, and the Contractor. On every project someone has to take
responsibility for the design (typically the Designer) and someone has to take responsibility for the
cost and the schedule (typically the Contractor). The easiest and simplest way to distinguish the CM
Not at Risk from the CM At-Risk, is to answer the question, Which corner of the triangle is the CM
in?
The CM Not At risk is up in the Owners corner (top) of the triangle and the CM At-risk is in
the Contractors (lower right) corner of the triangle. There is no gray area, the CM is either holding the
trade contracts and is contractually responsible for the successful performance of the work, or he is
not. The existence of a guaranteed maximum price or a schedule guarantee may affect the amount of
risk the CM At-Risk has, but he is still contractually responsible for the successful completion of the
project.
A CM Agency or Not At-Risk could be used in conjunction with any project
delivery method including Design-Bid-Build, Multiple Prime, Design-Build, or even CM AtRisk!

CM at-risk
CM at-risk is a delivery method which entails a commitment by the construction manager to deliver the
project within a Guaranteed Maximum Price (GMP). The construction manager acts as a consultant to
the owner in the development and design phases (preconstruction services), and as a general
contractor during construction. When a construction manager is bound to a GMP, the fundamental
character of the relationship is changed. In addition to acting in the owner's interest, the construction
manager must control construction costs to stay within the GMP.
CM at-risk is a global term referring to the business relationship of a construction contractor, owner
and architect (or designer). Typically, a CM at-risk arrangement eliminates a "low-bid" construction
project. A GMP agreement is a typical part of the CM-and-owner agreement (comparable to a "low-bid"
contract), but with adjustments in responsibility for the CM. The advantage of a CM at-risk
arrangement is budget management. Before a project's design is completed (six to eighteen months of
coordination between designer and owner), the CM is involved with estimating the cost of constructing
a project based on the goals of the designer and owner (design concept) and the project's scope. In
balancing the costs, schedule, quality and scope of the project, the design may be modified instead of
redesigned; if the owner decides to expand the project, adjustments can be made before pricing. To
manage the budget before design is complete and construction crews mobilized, the CM conducts site
management and purchases major items to efficiently manage time and cost.

2.03 Project Delivery Methods

A project delivery method is a system used by an agency or owner for organizing and financing design,
construction, operations, and maintenance services for a structure or facility by entering into legal agreements with
one or more entities or parties.

DESIGN BID BUILD

CHARACTERISTICS

Architect hired first by the owner

Owner/Architect
develop
complete documents

Architect is fully
constructability and design

program

responsible

After the project documents

designed, they are put out for bid

and

for

estimates,

are

completely

Traditionally the low bidder is selected to complete

project

Communication is directed through the Architect to the Owner

ADVANTAGES

Familiar delivery method

Defined roles/responsibilities for team

Allows more firms to bid

Initially presents the lowest potential cost for the project

DISADVANTAGES

No fast-tracking process available

Budgets may or may not be met...architects are not always current on pricing market(s)

Low bidder may

Owner has no control or input on sub-contractors

Process puts Owner as issue resolution agent if architectural documents and construction conflict

High potential for change orders and conflict

Owner control over GCs staff is limited

No cost savings sharing

Relationships can be adversarial

DESIGN BUILD

not understand

project goals, objectives and criteria

CHARACTERISTICS

Owner hires a GC or Design Build team

The Design Build team is fully responsible to the

owner for the delivery of a project

Typically at some point (as early

as possible) in
the process a GMP (Guaranteed maximum price) is
established

Communication for the project flows through the GC

or D/B team to the owner
ADVANTAGES

Owner has a single contract for design and construction

GMP is established early and owner risk

Except for Owner changes, no change orders

Project schedule can be accelerated/ fast-tracked if necessary

Owner involvement in the process is limited

is controlled

Construction budget control

Owner is not issue resolution agent
Opportunity for cost sharing

DISADVANTAGES

Owner has limited involvement

Difficult to establish criteria for selection of D/B team

Design is complete at GMP

Process may not bring best designer and best builder together for owner

Quality control is responsibility of D/B team, no checks and balances

OPTION Select architect and general contractor separately, then form D/B team
CONSTRUCTION MANAGEMENT AGENCY

CHARACTERISTICS
Owner contracts directly with Architect firm

Owner contracts directly with each sub-contractor

Similar to CM at

risk, but no guaranteed price

CM and Architect can be selected based upon

qualifications and expertise
ADVANTAGES

CM and Architect selection based upon qualifications

Projects can be delivered at accelerated/fast-tracked schedule

CM involved in budget development
Owner can select sub-contractor

CM responsible to deliver the project on budget and on schedule

DISADVANTAGES

CM has no contractual responsibility/control with sub-contractors

Final price not established until bids are received

Owner must manage multiple contracts

High level of Owner involvement

Higher Owner risk since

the Owner holds contracts

CONSTRUCTION MANAGEMENT AT RISK

CHARACTERISTICS

Owner selects the Architect based upon

qualifications and fee

Owner selects CM based upon qualification and fee

prior to design being completed or possibly started

Architect and CM work together to deliver the project

the owner requires

A GMP is established early in documentation

Competitive bid for subcontracts

ADVANTAGES

CM and Architect selection based upon qualifications

Owner can be involved in selection of CM team members

Early CM involvement to control budget and schedule

Owner may be involved in sub-contractor selection

All work except CM and A/E is competitively bid

GMP is established early

Projects can be delivered at accelerated/fast-tracked schedule

Opportunity for cost sharing
Ensures high quality at lowest cost

DISADVANTAGES

Design team may not take input from CM during design

Perception that price competition is limited

INTEGRATED PROJECT DELIVERY

CHARACTERISTICS


Owner selects CM and A/E based upon qualifications
prior to design being started

Owner/Architect/Construction Manager sign a joint

contract

Entire team establish the project goals and objectives

Characteristics similar to those of CM at risk

ADVANTAGES

CM and Architect selection based upon qualifications

High efficiency delivery

Fast-track process

Ultimate team project approach

Early involvement of not only CM & A/E but subcontractors for major trades

Owner risk is limited by team approach to risk/ reward incentives

Success of team members is measured against success of project

method

Opportunity for cost sharing

Increased ability to deliver project within budget and schedule

DISADVANTAGES

Newer delivery method

Requires very involved owner

Some contractual issues to be addressed