ORGANIZATIONS IN CONSTRUCTION - Civil Engineering …civil.emu.edu.tr/courses/civl493/2016-2017spr/CHAPTER 2... · CONTRACTUAL RELATIONSHIPS ... procedures •Tendering ... knowlegeable

CHAPTER 2

ORGANIZATIONS IN

CONSTRUCTION

Dr. TOLGA ÇELİK

Civil Engineering Department

1

CONTRACTUAL RELATIONSHIPS

• In order to finish a project, several parties have to cooperate together and a contractual relationship has to be established among them.

• If a client is lacking certain skills or does not have experience in the construction industry, that client will need to obtain advice on one or more of the followings:

• Feasibility study • Design of the works • Specialist equipment installations

• Preparation of contract documents and other contract procedures

• Tendering evaluation and procedures

• Construction programming and scheduling

• Supervision of construction works

• Certification of completed work for payment

• Dealing with variation orders and claims for additional payment.

2

TYPES OF CONTRACTUAL

RELATIONSHIPS

• Organizational contractual relationships

can be classified into three groups:

• Traditional contractual organization

• Design and construction

organization (TURNKEY)

• Professional Construction

management.

3

1. THE TRADITIONAL CONTRACTUAL

ORAGANIZATION

• Client has a direct contract with consultants to carry out the design and probably the supervision of construction.

• The client also has a direct contract with a contractor.

• The contractor will likely have a contract with all kinds of subcontractors (e.g. material suppliers).

• Some suppliers and/or subcontractors may be nominated by the client or the consultant.

4

1. TRADITIONAL CONTRACTUAL

ORGANIZATION

CLIENT

CONSULTANT CONTRACTOR

SUBCONTRACTOR OWN WORKERS

5

2. DESIGN AND CONSTRUCTION

ORAGANIZATION

• The client has a contractual relationship with

a design and construct contractor.

• If the client is lacking skills in preparing a

tender and evaluating it, a consultant may

be appointed to do it for the client.

• The contractor may arrange a design

consultant if the contractor is lacking design

skills from within his/her organization.

6

2. DESIGN AND BUILD

Client

Designer

Design & Construct contractor

Subcontractors& Suppliers

Constructor

Consultant

7

3. PROFESSIONAL CONSTRUCTION

MANAGEMENT

Has two systems

a. Management Contracting

b. Construction Management Organisation

8

A. MANAGEMENT CONTRACTING

9

The client has a contractual relationship with a

management contractor.

• The client also has a direct contractual relationship with

a design and cost consultant.

• The management contractor appoints a work contractor

and he has a direct relationship with the work

contractors that will carry out the construction works.

• Negotiated professional fee for construction

management services

• Negotiated professional fee for design services.


MANAGEMENT


MANAGEMENT

A. MANAGEMENT CONTRACTING

Client

Design and Cost Consultant

ManagementContractor

Work Contractor

Subcontractor & Supplies

10


MANAGEMENT

B. CONSTRUCTION MANAGEMENT ORGANIZATION

• The client enters into a direct contract with a professional construction manager, design and cost consultants and works contractor.

• The works contractor is in a direct contractual relationship with the client and not the construction manager.

• The construction manager will perform managerial functions assigned directly from the client.

• Fixed price, unit price or negotiated contracts. 11

Work

Contractor

Client

Construction

Manager

Subcontractors

& Supplies

Consultant

12


MANAGEMENT

B. CONSTRUCTION MANAGEMENT ORGANIZATION

COMPANY ORGANIZATION• Objective of organizing a company is to

arrange all required resources so that the

functions of company perform properly and

works are accomplished effectively.

• Organizing must

1. determine what individual job positions

are required

2. define the duties and responsibilities of

each job position

3. establish the working relationship among

the job positions

13

ORGANIZATIONAL CHARTS

• Organizational Chart is a pictorial format showing

all positions of

i) responsibility

ii) all lines of supervision and authority

iii) the lines of communication within the

organization

• They are effective for quickly describing a

company's structure.

• Chart is also useful for employees. Shows their

position in the company, identifies their

supervisor, those whom they supervise, and the

nature of their duties.

14

• The two predominant aspects of most

organization charts are those depicting

vertical and horizontal specialization.

– Vertical specialization refers to the

hierarchical structure of authority.

– Horizontal specialization is the

differentiation of functions within a level of

the hierarchy.

• Horizontal specialization can take in different

form the most common forms are:

– Functional

– Pure project

– matrix 15

ORGANIZATIONAL CHARTS (continued)

FUNCTIONAL FORM OF

ORGANIZATION STRUCTURE

• Functional Organization Structure results in horizontal grouping

according to functional skills and types of work task.

• The advantages of functional organization structure are.– They are simple.

– They can achieve a high degree of flexibility, because people

in the department can be assigned to the project, then

immediately re-assigned to other work.

– They provide good support as the work is usually carried out

in the department.

– The functional department provides the normal career path for

advancement and promotion.

– Lines of communication within the department are short and

well established.

– There is quick reaction time to problems within the department.

– They offer clearly defined responsibility and authority for work

within the department.16

FUNCTIONAL FORM OF

ORGANIATION STRUCTURE (continued)

• The disadvantages of functional organization structure are:

– No single point of responsibility as the project scope moves from

one department to another, this can lead to coordinating chaos.

– On multi-disciplined projects there are no formal lines of

communication between the people within the different

departments.

– Competition and conflict between functional departments may

limit effective communication of important project information.

– Departmental work may take priority over project work.

– For functional managers the project is not always the main focus

of concern, particularly when the scope has moved to

another department.

– Weak external coordination with the client, suppliers and other

stakeholders.

17

18

General

Manager

Engineering

and

Development

Production

and

Manufacturing

Sales and

Marketing

Accounting

and LegalDirector Level

Division Level

Department

Level

Section Level

Denotes continued breakdown

FUNCTIONAL ORGANIZATION CHART

PURE PROJECT ORGANIZATION STRUCTURE

• Project organization structure is based on assigning projects to each

organizational unit.

• Here the various functions, such as engineering and finance, are

performed within each unit.

• The advantages of pure project organization structure are:– Strong control by a single project authority

– With centralized authority decisions are made quickly.

– Encourages performance, schedule, and cost tradeoffs

– Personnel loyal to a single project

– Interfaces well with outside units

– Good interface with customer

– All members of the workforce report directly to the project manager.

– The lines of communication are shorter then the multi-disciplined

functional route.

– With the one boss situation the lines of communication, responsibility

and authority are clear and undisputed.

– There is a holistic approach to the project.19

PURE PROJECT ORGANIZATION

STRUCTURE (continued)

• The disadvantages of the pure project

organization structure are:

– Duplication of resources, as similar activities and

processes are performed by different elements

of the organization on different projects i.e.

inefficient use of company resources.

– Less opportunity for technical interchange

among projects

– Minimal career continuity for project personnel

20

21

President

Vice-President

project 1

Vice-President

project 2

Vice-President

project 30

Engeneering

Manufacturing

Engeneering

Marketing

manufacturing

Marketing

Engeneering

Manufacturing

Marketing

Engeneering

Manufacturing

Marketing

……

…

……

…

……

…

……

…

………

PURE PROJECT ORGANIZATION STRUCTURE

MATRIX ORGANIZATION STRUCTURE– Matrix organizational structure that attempts to place equal

emphasis on technical and product development and is a major

departure from traditional structures.

– This is achieved by having a structure in which responsibility for

reporting is to two authorities.

– It is used for undertaking project oriented activities where the

traditional functional or departmentalized structures would be

inappropriate.

– This form of structure is frequently used as a temporary expedient.

– In it each group of specialists reports to a functional manager of their

particular group of expertise and to a project manager.

– The project manager is responsible for achieving the project

objectives by building a project team consisting of members of

functional groups.

– In matrix organization, duplication of functional units is eliminated by

assigning specific resources of each functional unit to each project. 22

MATRIX ORGANIZATION STRUCTURE (continued)

• The advantages of matrix organization structure are:

• Project has a clear single point of responsibility - the project

manager.

• Combines strength of functional and project-oriented

organization.

• The project can draw on the entire resources of the company,

when several projects are operating concurrently, the matrix

structure allows a time-share of expertise and equipment, which

should leads to a higher degree of resource utilization.

• Rapid response to the client's needs. The client communicates

directly with the project manager.

• Good flow of information (dissemination) within the project.

• Problem-solving can draw on a much wider base for ideas and

options – brainstorming.

• Teams of experts within the functional department are kept

together even though the projects may come and go. Therefore

technology, know-how, expertise, experience are not lost when

the project is completed. 23

MATRIX ORGANIZATION STRUCTURE (continued)

• The following disadvantages are inherent with

the matrix structure:

• They are more complex because of the additional number of

managers involved that need to be kept informed and

consulted.

• Dual responsibility and authority leads to confusion, divided

loyalties, unclear responsibilities, and conflicts over priorities

and allocation of resources.

• They do not encourage strong staff commitment to the project,

particularly when staff from functional departments are

assigned on an as-needed basis.

• The cost of running a matrix organization is higher than a

functional or pure project organization because of the

increased number of managers involved in the administration

and decision-making process.

24

25

MATRIX ORGANIZATION STRUCTURE

Project Management Team (Planners, administrators,

supervisors) work under the direction of project

manager and has the following objectives.

1. The production of construction works satisfy client

functional requirements.

2. Completion of the project within specified time limits.

3. Completion of the project within specified cost limit.

4. Construction to specified standards

5. Preservation of health and safety people involved.

PROJECT MANAGEMENT TEAM

26

a) Project Manager • Project Manager keeps authority and responsibility to

manage the project.

• In appointing project manager, client will consider:

the qualification and experience required,

persons to whom he is responsible,

his terms of reference

limits of his authority,

his personal qualification, leadership skill.

TEAM ORGANIZATION

27

TEAM ORGANISATION (continued)

b) Steering Committee

In government project there may be difficulties in

fitting a project manager. Therefore, a steering

committee is established having functions of:

determining terms of reference for project

manager's team

approving the project management team

monitoring progress of the project

removing obstacles to progress the project.

28

c) Assistants of Project Manager

The composition of the team changes as

the project progress.

• The minimum continuous requirements

for Project management team are:

Project manager

Secretary

• For large projects there may be fulltime

Planning engineer

Quantity surveyor

Health and safety specialist.

TEAM ORGANISATION (continued)

29

A good contractor always,

keeps the staff at a minimum

places the right man at right position

gives freedom and responsibility

well defines the areas of each man

CONTRACTOR'S SITE ORGANIZATION

30

Contractor site key personnel are:a) the agent

b) site engineer

c) Office manager

d) general foreman

e) plant manager (foreman)

For large projects a contract manager also is appointed.

For small jobs, the duties of agent and site engineer may be combined and one foreman may be employed instead of two foreman.

KEY SITE PERSONNEL FOR CONTRACTOR

31

a) The Agent responsibility to direct and control the whole work.

has power to employ men, hire machinery, purchasematerial and employ sub contractors

all information are centralized upon him

his instructions go to right person by office manager and subagents.

his power depends on : size of the job

distance from head office

policy of the firm

his standing within the firm

knowlegeable in civil engineering works

a good organizer and command men

business senses to make profit

CONTRACTOR’S SITE KEY PERSONEL (continued)

32

b) The Site Engineer

checks that works are constructed to the right lines and

levels.

advises the agent on design and engineering matters

he has a section to look after in detail, measuring up the

works in his/her section weekly or monthly.

his duties are:

taking site levels

levelling & lining construction works

planning temporary works, roads, bridges

dealing with power supply & water supply & drainage.

keeping progress and quality reports.


33

c) The Office Manager The agent’s principal administrator within site office.

His responsibilities are: papers works

order for materials

receiving and checking accounts

making pay sheets etc

also administer pay clerk order clerk correspondence secretary accounts clerks invoice checker store keeper Messenger tea boys staff cars drivers night watchmen

34


d) General Foremen

he is the agent's right hand man for the execution of works

on the site.

he should have wide practical knowledge and experience.

he is able to read engineering drawings

he is actual boss of the workmen

he has foresight and planning ability

his major responsibility is to keep the work moving ahead

as planned.

35


e) Plant manager

He is advised by the agent for long-term plannings

He is advised by the general foremen for short term

(day to day plannings)

His major responsibility is

To maintain and make services of the plant

to keep them ready to be used any time

to maintain power supplies on the site.

36


37

Agent

Sub Agents

or Deputy Agent

Site Engineer

Assistant or Divisional

Engineers

Measurement

Engineers

Draughts men

Chainmen

General Foreman

Divisional Foremen

Gangers

Labourers

Foreman

Carpenter

Carpenter

Labourers

Plant

Manger

Fitters

Electrician

Chief

Clerk

Accounts

Clerk

Wages

Clerks

Store Keeprs

Checkers

Typists

CONTRACTOR’S SITE STAFF FOR A MEDIUM SIZED JOB

a. Resident Engineer

He is the engineer's representative & chief

responsible on the site to control the works done by

the contractor.

He is the opposite member to the agent for the

engineer.

his job is of seeing the works are built as the

engineer has designed

sees that contractor carries out all his obligations

he is responsible in all cases only to the engineer.

THE ENGINEER'S SITE ORGANIZATION

38

DUTIES OF THE RESIDENT ENGINEER

39

1. Coordinate the work of various contractors; to agree

detailed programs of works; to check that all

necessary instructions have been given to contractors,

2. Check all the materials are ordered in good time and all

necessary permits for them are obtained,

3. See that the requirements of specifications in regard to

materials and workmanship are compiled with the

contractors.

4. To watch for faulty workmanship or material, and to

issue instructions for remedying such faults.

5. Check the line and level and layout of the structure

conforms to the drawings.

6. Issue further instructions and classifications of detail as

are necessary,

7. Measure the amount of the work done for the purpose

of payment and to calculate such payments

8. Keep records of all measurements and test, and to bring

plans into conformity with the work as actually executed.

9. Act as a channel for all claims and disputes and to

provide the facts which are relevant

10. See that the finished works are free from defects, tested

and set properly functioning

11. Report regularly to the engineer on all the above matters.

However, this list does not necessarily include all the duties,

the resident engineer may have delegated to him other duties.

40

DUTIES OF THE RESIDENT ENGINEER (CONTINUED)

i) Engineering AssistantsThey assists the Resident engineer

The resident engineer continuously inform them about the progress

They take part in every section to improve their experience,

ii) InspectorsContinuously inspect the work outside and they

usually work outside

They are skilled tradesmen having practical experience

They advise the resident engineer when needed

They must be able to judge quality, workmanship and finish of work

THE RESIDENT ENGINEER'S STAFF

41

42

Office

Manager

Clerks

Typists

Contracts

Engineer

Account

Clerk

Records

Clerk

Deputy or Assistant

Resident Engineers

Assistant

Engineers

Inspectors

Resident Engineer

Specialist

Engineers

Soil

Mechanics

Concrete

Survey

Etc.

Draughts men

ENGINEER’S CONTROL STAFF FOR MAJOR PROJECTS

The aspects to be taken into consideration

while installing a new site are:

1. site layout

2. site access

3. Storage

4. Plant

5. site huts

6. temporary services

7. fencing

SITE INSTALLATION

43

1- Site layout

Every site has different shape, nature and

environment. However, the considerations are:

a) Analyze contract drawing and documents in detail

b) Check restrictions for permanent structures

c) Analyze construction methods to obtain required

space.

d) And then work out the area of the site left for

temporary structures, storage etc.

e) Site layout is especially important in towns with

limited space

44

SITE INSTALLATION (CONTINUED)

45

A TYPICAL CONSTRUCTION SITE LAYOUT

2- Site accessTwo types of accesses are considered

• Actual entrance from public highway

• access within the site

Actual entrance practical and sensible

approved by police and local Highway authority

permanent access could be temporary access

good visibility and clear obstructions

direction signs smooth flow of vehicles

width of the access should be enough for wide vehicles

Details of access should be given to emergency services.

46


Access within the Site:

convenient for loading and unloading

one way system is useful on large sites

If there is overhead cable put checker points on

two sides

access and roadway kept maintained, water

drained

Separate car park for small vehicles and for

vehicles not in use.

47


3. Storage

Storage on site is needed for:

to have enough material in stock

economic buying with bulk buying

expected changes in manufacturing

late delivery problems

limited availability.

48


4. Plant

• Selection of plant depends

primarily on the work to be done

secondarily on size and nature of the site.

• Keep records of plant

• Plant will be licensed and registered

• Static plant should have correct sitting place, e.g. tower-crane, concrete mixing plant, etc.

49


5. Site huts They are temporary building for duration of

construction

They could be prefabricated or mobile caravans

They are used for administrative purposes, storage,workshops etc

telephone should be provided in huts

They are placed near to site access for

a) finding easily by visitors

b) watching the persons & vehicles entering orleaving the site.

Huts are kept in groups according to their purposes, usages and required infrastructure, e.g. electricity, gas, internet, drainage, water supply etc.

50


6) Temporary services

On a construction site the temporary services are

– electricity,

– water,

– telephone,

– internet and

– drainage facilities.

7) FencingFencing is required

for protection of public

for securing premises

cost implications for feasibility for fences 51


HOMEWORK 1

AFTER GRADUATING YOU HAVE DECIDED TO

ESTABLISH A CONSTRUCTION CONTRACTOR

COMPANY.

WHAT TYPE OF AN ORGANISATION CHART

YOU PREFER TO USE FOR YOUR NEW

COMPANY AND WHY? DRAW THE CHART AND

EXPLAIN THE RESPOSIBILITIES AND

AUTHORITIES OF EACH POSITION.

WRITE A REPORT TO ANSWER THIS

QUESTION WITH NOT LESS THAN 500

WORDS.

SUBMIT YOUR REPORT ON 13rd MARCH 2017.52

STARTING THE

CONSTRUCTION WORKS

CIVL493S

Pre-commencement meeting and

start-up arrangements

Once a contract has been awarded, a meeting is

necessary. Such a meeting will be attended by the

employer or his key staff concerned, the engineer and

his proposed resident engineer, and the contractor's

manager and agent. Subjects of meeting are as follows:

• Exchange of addresses, telephone numbers, etc. and

establishing agreed lines of communication.

• Clarifying the resident engineer's delegated power,

and advising the contractor of his proposed staffing

and supervisory arrangements.

• The contractor's report on the agent's experience in

the type of work involved, in order that his

appointment can be approved by the engineer.

• Any particular needs for temporary works designs or

special methods of construction proposed.

• Arrangements for provision of sets of contract

documents to the contractor and indication of any

further drawings that will be supplied (e.g. bar

schedules).

• Progress by the contractor in obtaining bonds and

insurance (this is especially important where early

access to site is expected since this may not be

permitted until bond and insurance are secured).

• Proposed date for commencement, which, if not

agreed, will be set by the engineer after taking the

views of the contractor concerning his readiness to

mobilize, and of the employer concerning the

readiness of the site for occupation.

• The programme for construction which the contractor

is to produce within 21 days of award of contract, and

the consequent needs of the contractor in respect of

further information and drawings to prevent delay.

• The contractor's health and safety plan and how this

will work in conjunction with the employer's and

engineer's responsibilities for safety.

• Provisions for access to the site the employer may

require for his own staff.

The contractor's initial work• The contractor's agent will come to site with a small

nucleus of permanent employees to get started on the

actual work of construction as soon as possible.

• He visits the local employment office or employment

agencies to make arrangements for taking men on site.

• The agent need some clerical assistance on site from

the start; his office manager will accompany him and

will start getting to site a wide variety of equipment,

machinery and materials.

• Some will be sent from depot of contractor's head

office, but a large amount of supplementary equipment

may be required from local sources.

• Consumables required: picks, shovels, tools, fuel,

timber, office stationery, protective clothing, lighting

equipment, temporary fencing, furniture, canteen

equipment.

• Plant may be hired for digging trenches to lay water

supply and drainage, and a dozer for site clearance.

• A gang of men will be set fencing off the site, another

gang on making foundations for huts, and a third gang

on access road requirements.

• Site engineer is necessary for the setting out.

• The agent will start arranging for delivery to site some

materials required for early works.

• Sampling and testing can take a long time, so must be

started early if good quality concrete is required early

on the job.

• The agent visits with the resident engineer local

suppliers of ready-mixed concrete plants.

• It sometimes requires the combined efforts of the agent

and resident engineer to get early installation of

services such as telephones, power lines, sewer

connections and water supply.

The resident engineer's workWorks before going to site• The resident engineer should examining the contract

drawings and specifications, and have an opportunity

to have conversations with the designers.

• He should make a file of all information for:

• soil test data;

• geological information;

• levels and benchmarks used;

• rainfall and runoff data;

• details of special materials or equipment to be

incorporated in the job;

• addresses of authorities and personnel

• a brief history of how the job came about and the

dates and references of major decisions.

• the pre-tender Health and Safety Plan.

• Once the resident engineer is appointed everyone

expects him to take responsibility for seeing that all

site matters are done in due time.

• Thus the programme of construction to be agreed

between the contractor and the engineer will be one of

the documents carefully studied by the resident

engineer, so that he can check it in detail for its

consequences.

• The resident engineer must make sure he has with him

a final copy of the contract documents as awarded.

The site office• If possible, the resident engineer should prefer his site

office to be placed so that, the main traffic in and out of

the site can be observed.

• The office itself can range from a simple hut to a

veritable barracks, according to the size of the job.

• On a moderate sized job where the resident engineer

has two or three engineers to assist him he will need

• his own room;

• a drawing office for engineers;

• a secretary's office and filing room;

• a washroom and toilet;

• a small kitchen area where hot drinks can be made;

• a room where wet clothes can be stripped off and

hung up to dry;

• small store room for surveying and other equipment.

• Laboratories to be placed near his office.

Early matters to discuss with the agent• The laying of services to the job site - telephone, water

supply, electric power and drainage.

• The agent may ask the resident engineer to approve

proposals for hard standing for cars and the routing of

access roads.

• The liquid wastes, drainage and sanitation may prove

difficult to solve and require a treatment plant.

• The agent needs to know what are the local benchmarks

which have been used for the original survey of the area

for setting out purposes.

• The next topic may be the construction programme as a

whole.

Some early tasks for the resident engineer• At the end of the first week the resident engineer will

have a number of tasks to do.

• If bulk excavation is about to start, take levels of the

natural ground since there will be no chance later of

finding what the natural ground levels were.

• If the contractor has taken his own levels over the site

and the resident engineer has let pass the opportunity

of checking them, he will be in no position to argue

against the contractor's figure for the excavation.

• Another early task is to carry out and agree with the

contractor the state of existing buildings which might

be affected by construction of the contract works, and

the state of approach roads to the site. In this survey

sets of photographs of existing cracks or damage, as

well as general views, form an important part.

• The resident engineer must see that all productive top-

soil is stripped and stacked separately for later re-use.

• The question of disposal of excavated material will be

considered, like permissions, environmental effects,

etc.

• The next task the resident engineer is to check the

delivery times for any equipment or materials to be

supplied under other contracts or by the employer.

• On overseas jobs there may be many separate

contracts for the supply of materials.

• All these separate supply contracts have to be checked

in detail to ensure that nothing has been missed.

Meeting the employer• Shortly after his arrival on site the resident engineer

should see if the employer wishes to meet him.

• The employer may, for instance, be hoping that certain

sections of the work can be completed and made use of

by him before completion of the job as a whole; or he

may want certain sections left for the time being

because there is alteration possibilities.

• These matters impinge directly upon the contractor's

programme and could change the cost of the job.

• Therefore, they have to be looked into by the engineer.

• Many finishes, and particularly colour schemes, are

best left for the employer to choose.

• He may also need to attend meetings with local

community representatives to report on progress and

future activities and to try to find ways of minimizing

any nuisance caused by construction of the works.

Setting up the clerical work• It will be necessary to set up a system for the handling

of correspondence, measurement of quantities and

checking of contractor's interim payment applications,

and for log sheets of all technical data.

• Petty cash, 'enough but no more' must not be

forgotten.

• Petty cash never seems to balance, when the sum total

of what it should be comprises a miscellany of stamps,

a variety of small change, some crumpled notes, a

bunch of folded receipts, and list of expenditure in

practically everybody's handwriting.

• A deficit one week can become a surplus the next, and

vice versa.

• However, overall deficit is balanced from the salary of

resident engineer !!!

THANKS FOR YOUR

ATTENTION

67

Documents

ORGANIZATIONS IN CONSTRUCTION - Civil Engineering …civil.emu.edu.tr/courses/civl493/2016-2017spr/CHAPTER 2... · CONTRACTUAL RELATIONSHIPS ... procedures •Tendering ... knowlegeable