UK Professional Development

Academy

Module – Construction Project Management

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Introduction

Projects are comprised of beginning and ending as well. There are also certain defined
phases which come between the start of project and end of the project. A phase
consists of grouping the activities that have defined a beginning point and an ending
point. Phases are based on a sequence, where the first has to be completed before
moving to the next phase. There are no certain dates for completing the phases.
Therefore, some activities of the phases are continued to the next phases as well. But
some projects that have a beginning and ending dates which are defined clearly with the
expectation to complete the work accordingly. Four main phases comewith a project as
defined by The Project Management Institute (PMI). These main four phases of the life
cycle are:

• Initiation.
• Planning.
• Execution.
• Project closeout
Therefore, there is a requirement of a project to have some certain set of skills,
knowledge, and experience. The project leadership requires the ability of form a team,
experience to build a roadmap of a projectand also conceptual skills during the early
phases of initiating the project.
The Project Life Cycle

A project’s life cycle is an orderly sequence of combined activities to achieve the

objectives. A life cycle of a project consists of the different phases but these phases
differ due to complexity and diversity of the projects. Therefore, even within the same
industry the companies fail to agree on the life cycle phases. In literature there are
different approaches for project’s life cycle such as quality oriented model, control
oriented model, risk-oriented model and company-specific project life cycles. On the
other hand, there is also no unanimity on the number of phases and on the names of
phases which constitute a project’s life cycle.

Within a project the project managers and project teams have only one common goal to
carry out the project successfully within the constraints. We know that every project has
a starting point, end point and middle period during which the project accelerates
towards the completion. A standard project has four key phases which are initiation,
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planning, implementation and closure. These phases represents the path of a project
which takes them from its starting point to end. This path is also called as the project’s
life cycle.

Classical Project Life-Cycle:

The project’s life cycle which are used in the modern organisations differ from the one
another. Each project goes through some kind of systems analysis, design, and
implementation. The life cycle used in the organisation might differ from another.

• The survey phase and analysis phase may be combined together into a single
phase.
• There may not be a phase called hardware study if it can be taken for granted
that any new system can be implemented on an existing computer without
causing any major operational impact.
• The preliminary design and detail design phases may be lumped together in a
single phase simply called design.
• Several of the testing phases may be grouped together into a single phase;
indeed, they may even be included with coding. Thus, an individual organisation’s
project life cycle may have five phases, or seven phases, or twelve phases, but it
is still likely to be of the classical variety.

Project phases

The phases of a project’s life cycle are as follow;

 Project initiation

Initiation of the project is first phase. During this

phase the problems and opportunities are
identified and different solutions to the options
are defined. A feasibility study is conducted to
examine whether each option defines a way to
the problem and recommends a final solution.
Once the recommended solution is approved
then the project is initiated. Terms of reference
are completed by outlining the project’s objectives, scope, and structure. Project

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manager is appointed for the project and he/she starts recruiting the project team and
establishes the project’s environment. Then the project moves towards the planning
phase.

 Project planning

The detailed planning phase starts when the scope of a project has been established in
the terms of reference.

This involves creating a:

• Detailed project plan having details of the tasks, activities, timeframes and
dependencies
• Resource planning outlining the labour, materials and equipment required
• Financial plans with the costs of labour, materials and equipment
• Quality plan offering the quality targets, control measures and assurance
• Risk plan having the list of possible risks and strategies to overcome the risks
• Acceptance plan listing the criteria to be met to gain customer acceptance
• Communication plan defining the ways to communicate with the stakeholders
and for the workforce
• Procurement plan which will identify the external suppliers through which
products can be sourced

At this phase the project the planned completely and is ready for the execution.

 Project execution

At execution phase the planned project is executed which means the different plans of
previous phase are implemented. As the plans are executed at this stage, number of
management processes are commenced for monitoring and controlling of the project’s
deliverables. This phase also involves the identification of change, risks, issues, review of
deliverables, and quality assurance. If all the deliverables of a project are produced and
are accepted by the customer then this phase is closed and project is ready for the
closure.

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  Project closure

This phase includes the releasing of the final deliverables for the customer. In this phase
the documentation of the project is delivered to the organisation, project resources are
released, contracts with the suppliers are terminated and all the stakeholders are
informed about the closure of a project. The post implementation reviews are also
included in this phase or they can be done in another additional phase. The reviews
quantify the project’s success or failure and future of the project.

The Life Cycle of Construction Project

Each phase of the project has to close before moving to the next phase of the project.
The ideal time of updating the planning is the transition between each phase and
conducting the reviews of management and the project costs and prospects are
evaluated. To take advantage of the natural phases which take place as work
progresses, the projects must have been structured. The phases must have been
explained in the form of schedules and the form of accomplishments.

The major capital investment made in the project is usually represented by the
acquisition of a constructed facility to understand. It is about whether the owner is an
individual, private company or a public limited company. The facility provided for the
project is to satisfy the defined objectives which are specified by the owner. A project is
expected to meet market demands or needs in a timely fashion. Various possibilities
may be considered in the conceptual planning stage, and the technological and
economic feasibility of each alternative will be assessed and compared in order to select
the best possible project. The alternative sources of the financing the project will also be
examined with the consideration of available time and the finance available.

After defining the project scope, the engineering design in detail will be presented for
the construction. The estimation of costs will be presented to have cost control. The
delivery of material should have been planned clearly and controlled carefully during
the construction and the procurement stage of the project. Once the construction is
completed, then there is a short period of start-up of the constructed facility when it
comes to occupation it at first. In the end, the facility management is transferred to the
owner to have full occupancy up to the time when the facility is given for demolition.

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The project life cycle is said to be a process in which a project is implemented from the
beginning point to an ending point. This particular process can be very complex. It has
the following stages:

1. Preconstruction phase

The preconstruction phase of a project can be broken into conceptual planning,

schematic design, design development, and contract documents.

Conceptual design

• Important for the owner

• Owner hires key consultants during this stage, including the project manager,
designer, selecting the project site and establishes an estimate, schedule and
required time and program.
• The owner must have maximum information about the project.
• The important decisions are to proceed with the project or not.

Schematic design

• The investigation is made by the project team about alternative design solutions,
systems and materials as well.
• 30 % of the design for the project is completed in this stage.

Design development

• Main systems and components of the project are designed.

• Building good communication between owner, construction manager and
designer is during this stage because selections made during the design stage will
affect project appearance, cost and overall construction.
• In this stage, the project is taken to 60% design from 30%.

Contract documents

• For the bid packages like specification, bill of quantities, drawing and general
conditions, the final preparation of the documents is mandatory.
• There should be a close review of all documents by the construction
manager,and appropriate owner personnel are needed to minimise the conflicts
and changes.
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 • A complete and detailed cost estimate for the project can be made after
completing the contract documents.

2. Procurement phase (Bidding and award phase)

• The project is formally transited from design into construction.

• This stage starts with placing a public advertisement for every interested bidder
or to invite the specific bidders.
• This particular phase overlaps with the design phase in fast-track projects.
• If the project has phases, then there will be an advertisement for each work
package and will also bid out individually.
• It is considered as an important stage to choose the contractors who are highly
qualified. It is not wise a decision for selecting the under-bid contractors.

3. Construction phase

• Thisis considered as the actual physical construction stage of the project.

• This stage takes the project to the completion.
• The bulk of the owner’s funds will be spent over here.
• It is the resulted outcome from all of the previous stages.
• The deployment of the consultants for construction supervision and contract
administration.
• Changes made during construction may affect the project progress.

4. Closeout phase

• Transition to the actual use of the constructed facility from design and
construction.
• In this stage, documentation must be provided by the management team, as-
built drawings, shop drawings and operation manuals to the organisation’s
owner.
• All the changes that occurred are reflected in as-built drawings because they are
the original contract drawings.
• In this stage for avoiding mistakes in the future, the assessment of the project
team’s performance is necessary.
• The comparison should be made between the actual activity costs and the
duration that was planned.
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 • The costs and the durations which are updated will help is estimating the
schedules of future projects.

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Different approaches for executing Construction project
The construction management (CM) is considered as a service provided through using
project management techniques. These techniques are specialisedto design and manage
theconstruction project from the start to the end. CM is also referred as an extension of
the project management. The idea behind the construction management is to have
control over time, cost and quality standards of the project. Construction Management
(CM) is very much compatible when it comes to providing the delivery systems of the
project. It consists of design-build, design-bid-build, Public-Private Partnership and CM
At-Risk. The responsibility of CM is on the owner without any concern about the setting.
The contractor and the participative planner have thecentral stage in the project
management when it comes to management and coordination.

Construction is a process in which building and building systems are prepared and
formed. It begins with the planning, designing and financing and then continues until
the structure is completed and ready to serve for occupancy. The construction
management refers to the overall planning, controlling and coordination of all the
processes and functions included from very beginning to an end. It is all about fulfilling
the requirements of the client made for the project.

Orthodox or Traditional Approach

The sequential approach is followed

in the construction management. It
starts with the decision of owner for
procuring a facility; then thedesign is
finalised by the architect and then it
is delivered to the contractor under
client’s consultant supervision. Each
stage or phase is completed before
going to the next phase or stage.

These are the following

disadvantages of traditional
sequential approach:

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 • The owner's decision regarding the budget for building the facility is generally
based on the assessment of the feasibility report without tendering the work.
Thus, it lacks the input from the contractor, which may not match the budgeted
cost.
• The project is delayed as the contract is finalised after preparation of drawing
and specifications and presented by the designers to tender the bills.
• The price which is to be paid by the client will increase according to the general
contractor. It is upon the executed work of his department and the quotation of
subcontractors received by him.
• For the quality work and the performance, sub-contractors are responsible till the
contract completes.
• The contact is secured by perceiving the work should meet the minimum quality
stipulation by the general contractors. Therefore, the minimum quantity and the
quality will result in the emergence of conflicts and claims between the
contractor and the client.

The owner is considered accountable in the end for the delays in time and cost of
inefficiency occurred in the sequential approach.

The Fast Track Approach

Sometimes, the phases of a project can be overlapped up to some portion which will
lead to the emergence of risk which is acceptable. This particular overlapping in phases
is known as the fast-tracking approach. The fast-track development approach is used for
minimising the time of the construction project through overlapping the phases of
project development. For example, in a construction of the building, once the
foundation and architectural drawings are ready, then the work of foundation can be
commenced.

This particular approach demands coordination of high degree and the process of
gathering the information should be fast to maintain the pace of the construction. The
further complications are added through it to the project which is already complex. But
it is much faster as well. In comparison to the sequential traditional, it minimises the
client’s efforts, time and cost required for the project.

As it is observed that in some of the projects, the client have the priorities above the
cost to be incurred or estimated. Such as, the client prefers that work should be

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completed as soon as possible. It might happen in the case where the project is to be
completed before the deadline announced for the project completion. In case of the
risk, the costis changed,or the work is initiated for the emergency situation or the
project is financed through debt.

Fast-tracking is a technique which can be used to minimise the overall time taken by the
projects by facing the overlaps in the certain tasks which serve as the limitation in the
traditional contracts which can’t be continued until the previous phase or task is not
completed or finished. This can save a huge amount of time wasted during the
overlapping.

This technique is used to perform the activities in a parallel way at by using the activities
that were sequenced according to the original schedule. Fast-tracking approach explains
that the activities can be performed at the same time. Rather than waiting for some
activities to be completed first and then to initiate the next activities. But this can be
applied only where the activities are overlapped.

The fast-tracking approach normally doesn’t contain any cost, so you should consider
this technique first whenever you’re in need to compress the schedule. This technique is
all about rearranging the activities from the original schedule. The fast-tracking
approach may cause a high risk rather than increase the cost of the project because as
the activities are being performed in a parallel manner which may cause to rearrange
the whole project. The project manager needs to consider the advantages and the
disadvantages associated with adopting the fast-tracking approach which may increase

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the high risk. This particular technique includes performing the various activities of the
project simultaneously, which increases the risk.

The schedules with a shorter period are very much desirable that can vary with the
owners of the building. The shorter schedule will minimise the overcrowding, providing
new homes for the people to live, can also reduce the manufacturer’s time to the
market. The shorter schedule can also reduce the cost of construction. Also the
financing required for the project and the can also reduce the overhead cost for
constructing and designing the organisations. The impact of inflation can also be
reduced through the shorter schedules.

But it is much difficult to manage the Fast-tracking approach as compared to the

traditional sequential approach. When it comes to executing the work, detail and
conceptual knowledge, efficient and effective planning and integrity and coordination
among the organisationare required.

The Fast Track Project Planning approach also requires an accurate definition of the
deliverables. Stakeholders who are accustomed to a shoddy project planning process
and many change orders will be surprised at the commitments they must make about
what they want. Through complete and detail planning on the remaining deliverables
instantly, it is after starting the work on first main deliverables. The risk inherent will be
reduced in Fast Track Project Planning Approach. The stakeholders try to avoid from
putting their efforts in the project after the project planning has been performed
regarding the first deliverables. The managers need to be very much careful that the
planning should not be delayed at that time. The further work on the first major
deliverable will increase the expenses.

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Directing and Managing the Project Work
The Direct and Manage Project Work process belongs to the Project Integration
Management knowledge area. There are few outputs of the deliverables:

• Work performance data.

• Change requests.

Some activities in this process include managing IT risk, performing activities to

accomplish project objectives, and managing sellers and suppliers.

Perform Quality Assurance

This particular process is related to area of Project Quality Management. It includes
auditing of quality control measurements and quality requirements as well. This process
ensures that operational definitions and quality standards are used throughout the
execution of the project.

Acquire, Develop and Manage Project Team

All these processes are considered as a part of the knowledge area of Project Human
Resources Management. The key outputs of are:

• Acquire Project Team: Typical outputs consist of staff assigning and making
resource calendars. Negotiations and Acquisitions are also considered as its part.
• Develop Project Team: Typical outputs include conducting the assessments of
performance. All development related activities like training and building the
team are initiated in this process.
• Manage Project Team: Typical outputs include the project management plan
updates and other necessary project documents. Conflict resolution Project
performance appraisals are also part of it.

Manage Communications
It relates to managing the communications for the project. It includes internal
communication as well as external communication among the team of the project.
External communication management can assist in a great deal to set the expectations
and providing information to stakeholders about the progress.

Conduct Procurements
The key activities in this process are:

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 • Selecting a seller.
• Awarding a contract
• Signing an agreement.

While the key inputs of this process are:

• Make-or-buy decision
• Source selection criteria
• Seller proposals
• Procurement statement of work.

Manage Stakeholder Engagement

Managing stakeholder expectations, stakeholder needs, and addressing issues in the
project life-cycle. Key outputs of this process are the issue log and change requests.

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Sources of Project financing
There are various kinds of sources used for providing the funds to the companies for the
investment in the project. The companies have the option of debt financing which refers
to taking a loan from the financial institution, or they can avail the option of equity
financing. Mostly, companies prefer to select the debt financing for the projects and
take debt from banks. The interest is charged against the principal amount taken by the
borrower, and then the borrower repays that amount in the form of instalments.

These are the following various sources of funds generation:

• Commercial banks loans

• Through theact of community reinvestment
• Grants from Department of Housing & Urban Development (HUD)
• Private loan and grants.
• Through market for secondary mortgage
• Fund from thedepartment of agriculture loan.

These are the following various sources used to fund a project:

1-Public Finance
The project of infrastructure can be financed through using public finance. The
government borrows funds from general public to finance by giving an independent
warrant to the lenders to pay back all of their funds. The government can also use the
option of equity to use the funds. Lenders make an investigation to ensure the ability of
the Government to raise their funds through collecting taxes and the revenues of
general public enterprises by implementing new tariff revenues coming from the
project. Therefore, the independent liability is transferred into a liability for the
Government’s financial obligation. The Government is involved in providing funds to the
various projects from last few years through using the existing surplus of funds. It can
also be through the issued debt which is to be repaid over a specified period. Later on, it
was considered as a lengthy, unattractive and difficult process of funding by the
Government.

2-Corporate Finance
It refers to borrowing the funds for constructing a new facility and it guarantees to pay
back the lenders from the operations available income generated from operations by
using the assets. The company has the option to give its equity. While performing the
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credit analysis, lenders check the total income of the company, its assets as well as the
liabilities. This loan will become a liability of the company.

3-Project Finance
A team of private firms decided to launch a new project of an infrastructure. Various
sponsors arein search of making the profits through capitalising the project company by
contributing multiple equities. The funds are borrowed from the lenders by the
company. The lender will estimate the future streams of revenue that are expected to
come from the project. And assess the ability of the company to repay the loan. In host
country, the Government won’t ask for providing the guarantee to the lender and will
sponsor the firm having a limited guarantee. The assets of the particular project and the
expected revenues of the future mainstream are used to raise funds during
arrangements for providing the finance.

The newly formed company has a low amount of equity required to issue the debt at a
very reasonable rate, with having equity between the averages of 10 to 30 % out of the
total capital that is required for the project. The various individuals usually hold these
small sharesto sponsor by making sure that subsidiary is not formed. Every company has
a different kind of legal structure. There can be various sponsors for a project company.

The reasons could be:

• The project reaches to level above the financial and technical capabilities of any
single sponsor
• To share the project risks
• The economies of scale can’t be achieved through smaller projects as compared
to a larger project, regarding capability, there is amutual complement in the
sponsors
• The process encourages a joint venture with certain sponsors
• The legal and accounting rules stipulate the maximum equity position by a
sponsor.

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References and Further Reading
Chitkara, K.K., 1998. Construction project management. Tata McGraw-Hill Education.

Clough, R.H., Sears, G.A. and Sears, S.K., 2000. Construction project management. John
Wiley & Sons.

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