Main Aspects of Construction Management - Coursework Example

CONSTRUCTION MANAGEMENT by of the of the of the School 29 March Introduction As a result of divisions among parties, lack of mechanisation, poor instruction, resistance, and slow adoption of technology and ICT in the Construction Industry, it has experienced a lot of failures in the past. Millions of pounds have been used each year in an effort to repair and correctively maintain constructed buildings. Majority of occupants, particularly in the United Kingdom lived in distress, due to the presence of countless faults within their houses. Douglas and Ransom point out that “a seemingly endless stream of incompetent, embarrassing, and sometimes dangerous series failures in construction work” (2007, p. 10) gave the industry a poor reputation. During the last decade, a number of improvements have been made in the industry, such as partnering that has led to more integration, productivity, and success in construction projects. Collaboration Philosophy Collaboration philosophy in the construction industry is also known as partnering philosophy or partnering. Despite the fact that there has always been partnering between private clients and contractors, the concept gained explicit significance in the mid-1980s (McGeorge and Zou, 2013). The employment of partnering by the United States Army Corps of Engineers and the efforts of the Construction Industry Institute of the United States are both acknowledged for introducing partnering as a drive in the construction industry at the end of the 1980s (McGeorge and Zou, 2013). Today, the United Kingdom strongly relies on partnering in order to promote productivity in the construction industry as encouraged by the Latham Report (McGeorge and Zou, 2013). In Australia, the Gyles Royal Commission advocates for partnering in the construction industry for productivity. New Zealand also advocates for partnering in construction. Despite the fact that these nations support partnering as a tool for improving productivity in their construction industries, the United States is the only nation that seems to wholly accept it, as the procedure is still viewed as uncertain and highly complex (McGeorge and Zou, 2013). According to McGeorge and Zou, “the extent of the adoption of partnering by the construction industry at large is still difficult to quantify and in some quarters, there is some dubiety about its diffusion in the construction industry” (2013, p. 99). Australia falls after the United States as it has also relatively adopted partnering and run competitions on satisfactory instances of partnered projects through the Masters Building Association. McGeorge and Zou define partnering as “a process for improving relationships among those involved on a construction project to the benefit of all” (2013, p. 100). The philosophy is being applied as a management tool in the construction industry, to be applied from the start of a construction project. It is believed that partnering accentuates an environment of cooperation, trust, and teamwork among associations and groups of associations. Through the philosophy, functioning alliances that implement the systematic approaches of communication and commitment through teamwork and trust to avoid disputes are created. This in turn forms a unified partnership that enables the successful completion of a construction project. Jones identifies trust, equity, commitment, implementation, development of mutual goals and objectives, timely responsiveness, and continuous evaluation as the principal elements of partnering (1998). Through the partnering process, the people mainly involved in a project get to analyse it, as well as their goals. From the execution stage to the end of the project a number of activities for the partnering process are carried out. These include instructing each party about commitment and the principles of partnering, the objective of the partnering is made clear at the beginning of the project, and commitment is obtained from the top management of each band at the commencement of the association. In addition, a partnering workshop is organised before the beginning of the project in order to come up with a mission statement, and “a method for periodic evaluation of the project partnering guidelines to ensure that maximum cooperation and problem solving are occurring” (Jones, 1998, p. 394) is provided. ADR procedures, which are essential for solving advanced problems, are provided. These include nonbinding arbitration or small trials, mediation, facilitated negotiations, and dispute review boards. Classifications of Partnering There are two main classifications of partnering. These are project partnering and strategic partnering. McGeorge and Zou (2013) point out that “strategic partnering is sometimes referred to as multi-project partnering or less frequently , as second –level partnering and project partnering as single project partnering or first-level partnering” (p. 100). In strategic partnering, two or more firms link up for a long duration and engage in more than one construction project. On the other hand, in project partnering, two or more firms usually link up for a short duration and only engage in one construction project. Strategic planning holds more benefits and gains realised from the long partnership, as opposed to project planning. Project planning usually acts as an avenue towards strategic planning. New Engineering Contracts In order to encourage good management, ensure clarity and simplicity, and improve flexibility, which lacked in the conventional forms of contracts in construction projects, the New Engineering Contract (NEC) was adopted. Therefore the reason for the introduction of NEC was to bring about project management in contractual agreements. Marsh makes it clear that “the term New Engineering Contract (the NEC) has been retained although it is now entitled ‘The Engineering and Construction Contract’” (2000, p. 94). An NEC contains the fundamental provisions of a contract, primary option classes for the selected method of procurement, and alternate options chosen by the purchaser. The contract can apply to any type of work such as plant design, building, construction, and civil engineering. The first NEC contract document was published in 1993, and was intended to be used between a contractor and an employer for either the construction or design and construction of a building or engineering project (Bennett and Baird, 2001). The document was originally known as the New Engineering Contract, but other forms of contracts were added to the category changing its name to the Engineering and Construction Contract (ECC). The acronym NEC was however adopted. According to the Institution of Civil Engineers, “NEC has matured from being a revolutionary contract in the early 1990s with some interest and use from forward-thinking organisations seeking change in how they go about engaging suppliers in a non-adversarial manner” (2005, p. 1). In 1995, NEC2 was published and it soon became the preferable contract for many companies in the United Kingdom. NEC3 was published after NEC2. It “is the result of feedback from industry on many years of successful use and is the first time that the complete integrated set of NEC documents have been launched at the same time” (Institution of Civil Engineers, 2005, p. 1). NEC3 is intended to help in achieving the objectives of clients more for all projects undertaken by ensuring that the elements of performance, quality, time and cost are taken into account. A number of NEC3 contracts have been published; the following table lists them in detail: NEC Title Abbreviation Brief Description NEC3 Engineering and Construction Contract (June 2005) ECC This contract should be used for the appointment of a contractor for engineering and construction work, including any level of design responsibility NEC3 Engineering and Construction Subcontract (June 2005) ECS This contract should be used for the appointment of a subcontractor for engineering and construction work where the contractor has been appointed under the ECC. NEC3 Engineering and Construction Short Contract (June 2005) ECSC This contract is an alternative to ECC and is for use with contracts which do not require sophisticated management techniques, comprise straightforward work and impose only low risks on both client and a contractor. NEC3 Engineering and Construction Short Subcontract (June 2005) ECSS This contract can be used as a subcontract to ECC or ECSC. It should be used with contracts that do not require sophisticated management techniques, comprise straightforward work and impose only low risks on both the contractor and subcontractor. NEC3 Term Service Contract (June 2005) TSC This contract should be used for the appointment of a supplier for a period of time to manage and provide a service. NEC3 Professional Services Contract (June 2005) PSC This contract should be used for the appointment of a supplier to provide professional services. NEC3 Framework Contract (June 2005) FC This contract should be used for the appointment of one or more suppliers to carry out construction work or to provide design or advisory services on an ‘as instructed’ basis over a set term. NEC3 Adjudicator’s Contract (June 2005) AC This contract should be used for the appointment of an Adjudicator to decide disputes under the NEC family of contracts. It may also be used for the appointment of an Adjudicator under other forms of contract. Institution of Civil Engineers, 2005, p. 2 Effects of NEC3 on Relationships and the Construction Process NEC3 contract forms endorse partnering. The number one provision in the NEC3 Engineering and Construction Contract requires cooperation and mutual trust from the involved parties. The contract highly supports partnering by integrating sound project management methods. These methods include time, risk, and cost management. The core provisions of the NEC3 place particular emphasis on the early warning process, compensation events, and the programme. The main NEC3 contracts have a mechanism for assessing and rewarding satisfactory performance called the X20 mechanism (Patterson and Macdonald, 2011). Option X20 is flexible enough to allow the inclusion of financial consequences in assessing and rewarding performance. According to options C and D of the NEC3 Engineering and Construction Contract, parties are required to jointly manage risks and costs through a straightforward commercial incentive. This means that immediate transparency about the actual cost of the work should be provided. NEC3 promotes commitment of contractors in more cooperative ways and this helps in establishing partnering relationships and promoting overall productivity of a project. Through the NEC3 contracts, the second stage under the Engineering and Construction Contract relies on the first stage of the NEC3 Professional Service Contract to establish the timescale, scope, risk, and cost allocation (Patterson and Macdonald, 2011). The framework of the NEC3 contracts offers an accommodating basis for multi-project associations with contractors that are bound to take a long duration. NEC3 contracts therefore support strategic partnering. Option X12 of NEC3 contracts supports collaboration or partnering of multiple parties (Patterson and Macdonald, 2011). Through it, partners can engage in a multi-party collaboration agreement without creating a multi-party contract. Option X12 basically allows a cooperative fundamental group of partners to work together in managing a project. An outline of how partners are required to work together is provided in a distinct partnering information document. Key performance indicators for the project level are also included. Role of the Project Manager and Effects on Project Outcome According to Hedeman, Heemst, and Fredriksz, “the Project Manager is responsible, within the limits set by the project Board, for the day-to-day management of the project” (2009, p. 4). The way that a Project Manager manages depends on his position in a project and the kind of project. In a project the scope, time, risks, costs, quality, benefits, and people have to be managed. Scope. The content and scope of a project is defined by the Project manager, especially when appointed at the early stages. The scope of a project therefore covers the work to be done and the end result expected from a project. Time. This refers to the duration taken by a project from the beginning to the end. Hedeman, Heemst, and Fredriksz (2009) point out that “this encompasses the end-to-end lifecycle of a project, including the handing over of the end result” (p. 4). Risks. Projects are prone to a variety of risks attributed to the degree of uncertainty that they hold. However, if managed well uncertainties are not a problem. Woodward mentions that “project managers should know how to assess these risks and take action either to avoid them or to deal with them” (1997, p. 166). Costs. A variety of costs such as project management costs and costs used in making products are incurred in a project. A Project Manager has the responsibility to manage them and ensure that they are well utilised until the successful completion of a project. Quality. This is used in reference to the end result of a project. According to Hedeman, Heemst, and Fredriksz (2009) “staying within budget and delivering on time is not enough” (p. 4). The end result of a project has to meet the requirements set at the initiation of a project. Benefits. A project manager has the responsibility to set out the reasons, goals, and the proportion of costs in relation to the expected benefits of a project. People. According to Woodward “project management is very much concerned with the interactions between people in terms of passing information, issuing instructions, controlling the work of other people, making changes, and educating and training the less experienced” (1997, p. 166). The main responsibilities of a Project Manager therefore include planning, commanding, supervising, and controlling all aspects of a project. Planning activities are the chief tasks that a Project Manager undertakes during the whole of a project. The project management plan “provides input to the executing processes, to the monitoring and controlling processes, and to the closing processes” (Dinsmore and Cabanis-Brewin, 2006, p. 29). By iterating and executing the processes involved in a project, the Project Manager is able to achieve the desired outcome. With a project management plan in hand, a Project Manager is able to properly manage resources and the project team. In order to survey all aspects of a project, monitoring and controlling methods are a necessary tool for the Project Manager. The processes help in identifying potential problems and deciding on a remedial action to avert them, so that they do not get to affect the final outcome of the project. “Monitoring includes collecting data, assessing the data, measuring performance, and assessing measurements” (Dinsmore and Cabanis-Brewin, 2006, p. 29). Despite the fact that projects are usually influenced by many factors, which can be internal or external to an organisation, Project Managers are required to know and understand these factors and their effects on a project during the various phases that it goes through. The outcome of a project is not only influenced by the Project Manager, but also other stakeholders, who may not even be part of the workforce. Stakeholders play a definite role in determining the outcome of a project. The Project Manager however plays a cardinal role. By taking proper steps in steering a project in the right direction the desired outcome can be achieved and so he or she plays the main role in determining the success or failure of a project. All Project Managers have all the freedom to use their power and authority to make decisions and delegate actions for the achievement of a project’s objectives. Recommendations Improving productivity in the construction industry is not simple. However, with determination and collaboration among involved parties the industry can achieve greater heights of success and productivity. There is need for elimination of unnecessary costs in the construction industry and focus on the achievement of benefits. Continuous monitoring and assessment of new practices and concepts as they continue to emerge is necessary in order to maintain success and productivity. Continuous improvements through research, standardisation, value engineering, risk management, prefabrication, benchmarking, and total quality management are also vital. Conclusion Partnering, proper training, automation, and use of technology in Engineering have proved to be effective in ensuring client satisfaction, and overall productivity and success of construction projects. The traditional notion that industries only need to look out for their own interests and compete against others was the main reason behind the endless failures in the construction industry. Partnering has mainly proved to be effective, as parties adopt an attitude of cooperation and trust, with a focus on success in projects. The benefits of cooperation have been realised and the philosophy of collaboration is slowly being understood and embraced not only in the United Kingdom, but in other nations as well. Reference List Bennett, J. and Baird, A., 2001. NEC and Partnering: The Guide to Building Winning Teams. Heron Quay: Thomas Telford Publishing. Dinsmore, Paul C. and Cabanis-Brewin, J., ed., 2006. The AMA Handbook of Project Management. New York: AMACOM.  Douglas, J. and Ransom, W. H., ed., 2007. Understanding Building Failures. Abingdon: Taylor & Francis. Hedeman, Bert H. G., Heemst, Vis van and Fredriksz, H., 2009. Project management: based on Prince2 2009. Zaltbommel: Van Haren Publishing. Institution of Civil Engineers, 2005. NEC3 Box Set. Heron Quay: Thomas Telford Publishing. Jones, Glower W., ed., 1998. Alternative Clauses to Standard Construction Contracts, Second Edition. New York: Aspen Law & Business. Marsh, P. D. V., ed., 2000. Contracting for Engineering and Construction Projects. Burlington: Gower Publishing Company. McGeorge, D. and Zou, P., ed., 2013. Construction Management: New Directions. West Sussex: John Wiley & Sons, Ltd. Patterson, R. and Macdonald, M., 2011. NEC3 Contracts for Partnering. [online] Available at: < http://www.neccontract.com/news/article.asp?NEWS_ID=782> [Accessed 30 March 2013]. Woodward, John F., 1997. Construction Project Management: Getting It Right the First Time. Heron Quay: Thomas Telford Publishing.     Read More