MODULE 3 – Construction Project

Organization and Manpower

CE 16 - Construction Methods and Project Management

Prepared by:
Engr. Roviel S. De Guzman, RMP, MSCM
I. INTRODUCTION
This unit discusses the description of principal players in any construction projects as
well as their general and specific tasks in organization.

 ESSENTIAL QUESTIONS
1. Who are the people involved in a construction project?
2. What are the general and specific tasks of these people?

 INTENDED LEARNING OUTCOMES

1. The students will be able to identify different people involved in a construction project.
2. The students will be able to differentiate between skilled and non-skilled workers.
3. The students will know the general and specific tasks of people in a construction organization.
.
A. THE PROJECT PLAYERS
Today’s master builder is a collaborative team with diverse skills and expertise. Many, many
players are involved, and they all make a valuable contribution to the effort while at the same
time adding to the complexity of the process. It is very important to understand the various
roles and responsibilities of these many players as they influence the construction management
process.

In addition to getting to know the primary players in the game, you need to know the
secondary players involved and the various layers of influence and risks associated with their
involvement. Understanding the intricacy of these relationships will help you appreciate the
management function in construction.
PRIMARY PLAYERS
The three principal players in any construction project are the owner, the designers (architects
and engineers), and the contractor. Although these three parties are always involved in a
project, the alignment and contractual relationships among them will vary depending upon the
project delivery system utilized to deliver the project.
1. OWNERS
No construction would ever be accomplished without owners. They are the driving force behind
the construction industry. Their demands for housing, commercial facilities, industrial products,
and infrastructure are the chief motivation to build. After determining need and deciding to build,
the owner is accountable for four primary duties:

a.Developing the program and outlining the needs and requirements of the end users

b. Determining the quantity, extent, and character of the project by defining the scope of work

c. Creating the overall budget for the project, including land acquisition (if necessary),
development, design, and construction costs

d. Providing the funding for the project and making periodic payments to the designers and the
contractor
1. OWNERS
No construction would ever be accomplished without owners. They are the driving force behind
the construction industry. Their demands for housing, commercial facilities, industrial products,
and infrastructure are the chief motivation to build. After determining need and deciding to build,
the owner is accountable for four primary duties:

a.Developing the program and outlining the needs and requirements of the end users

b. Determining the quantity, extent, and character of the project by defining the scope of work

c. Creating the overall budget for the project, including land acquisition (if necessary),
development, design, and construction costs

d. Providing the funding for the project and making periodic payments to the designers and the
contractor
1. OWNERS
TYPES OF OWNERS
How an owner accomplishes these tasks is often determined by what type of owner they are.
There are basically two types of owners—public owners and private owners.

Public owners are typically government agencies such as the General Services Administration,
the Army Corps of Engineers, or the state departments of transportation.

Private owners make up the bulk of construction spending and may take the form of an
individual building a single home, a developer who builds speculatively, a small manufacturer
enlarging operations, or a national firm that owns numerous facilities. Funding comes from private
sources such as banks, investment brokers, and venture capitalists.

Program - A written statement that identifies and describes an owner or end user’s needs and
requirements for a facility. Every design starts with a program.
2. DESIGN PROFESSIONALS
Two types of professional designers are engaged in the construction process, and each deals with
different parts of the project design. Architects deal with the function, life safety issues, and
aesthetics of the building, and engineers deal with the systems. They typically work together to
complete the design function with one or the other taking the lead, depending on the type of
facility being constructed
2. DESIGN PROFESSIONALS
The construction manager works with both the architect and the engineer on a regular basis
throughout the construction process. The following are the primary responsibilities of the
designers:

a. Assisting the owner in developing the facility program and determining end user needs and
requirements

b. Advising the owner regarding the image and character of the facility and establishing broad
design goals

c. Assisting the owner in selecting products to fit the program and the budget

d. Advising the owner on special and aesthetic issues and generating graphic solutions to
problems

e. Developing the final building plans, construction details, and specifications

2. DESIGN PROFESSIONALS
Architects
Architects are licensed professionals trained in the art and science of building design. They
transform the owner’s program into concepts and then develop the concepts into building images
and plans that can be constructed by others.

In addition to completing a four- or five-year college program, architects are also required to
have a number of years of experience and pass an exam before they can become licensed.
2. DESIGN PROFESSIONALS
Design architects
Design architects are the creators of the aesthetic solution— they are the concept and idea
people. Although most design architects can only hope to achieve celebrity status, some become
quite famous. We often recognize their names in association with their creations and sometimes
referred to as signature architects. Owners often seek them out because of their reputations
2. DESIGN PROFESSIONALS
Architectural technicians
Architectural technicians are typically the drafters of the building plans. They are the ones who
actually produce the drawings that are used for construction. They work from preliminary
sketches and concept drawings provided by the design architects.
2. DESIGN PROFESSIONALS
Specification writers
Accompanying the plans for a new building is a written project manual that contains the
specifications for the project. The plans and specifications compose two parts of the legal contract
for construction. (A third component is the contract forms themselves.)

The specification writer is responsible for spelling out the specific products and methods that are
to be used on a project in order to ensure a particular level of performance and quality.
2. DESIGN PROFESSIONALS
Engineers
Engineers are usually the lead designers for heavy civil and industrial projects. Engineers are
regulated by professional licensing requirements that include a four- or five-year college program,
a specific number of years of experience, and the passing of a professional licensing exam.

However, in building design, they are most often hired as consultants by the architects. In this
scenario, they have no direct contact with the owner.
2. DESIGN PROFESSIONALS
There are many different engineering specialties; the most common ones associated
with construction activities are described next:

Structural engineers
Structural engineers design the timber, concrete, or steel structural systems that support a
building and basically hold it up to withstand the forces of wind, gravity, and seismic activity. They
design the foundations, beams, girders, and columns that make up the skeleton of the structure.
2. DESIGN PROFESSIONALS
Mechanical engineers
Mechanical engineers design the heating, cooling, ventilating, plumbing, and fire suppression
systems within a building. They coordinate their efforts with the architectural design, the
structural design, and the electrical design.

Electrical engineers
Electrical engineers design and calculate electrical loads and determine the circuitry, lighting,
motors, transformers, and telecommunications needed for a building. They typically work closely
with the architect to ensure that the owner’s expectations are met and often coordinate their
efforts with the mechanical engineer.
2. DESIGN PROFESSIONALS
Civil engineers
Civil engineers design roads, bridges, tunnels, dams, site drainage, parking lots, runways, and
water supply and sewage systems. Civil engineering, considered one of the oldest engineering
disciplines, encompasses many specialties.

Civil engineers are the ones who take the bare land and excavate it, move it, drill it, and shape it
to meet the needs of the architectural design and the construction. Site work is one of the most
unpredictable and expensive aspects of any construction project, and good design makes all the
difference in the world.
2. DESIGN PROFESSIONALS
Landscape Architects
Many people do not understand the distinction, but landscape architects are professionals licensed
and regulated by an entity separate from building architects. Landscape architects deal with the
building site and outside environmental issues surrounding the structure. They are involved with
such things as plantings, sidewalks, retaining walls, and water features to enhance the project.

Interior Designers
Not all projects will engage the services of an interior designer. They may be hired directly by the
owner or be a consultant to the architect. They deal with the building’s interior finishes or
schemes and make decisions regarding furniture selection and placement, paint colors and
accessories, light fixtures, window treatments, floor finishes, and ceiling treatments. The
contractor may or may not have direct dealings with the interior designer.
3. CONSTRUCTION PROFESSIONALS
According to the American Institute of Constructors, the term constructor is generally used to
define the professional responsible for all construction activities whether they work as a general
contractor, a construction manager, or a specialty contractor.

The profession of constructor includes job titles such as, but not limited to, project manager,
general superintendent, project executive, operations manager, construction manager, and chief
executive officer. The constructor’s job is to do the following:

a. Interpret the plans and specifications and prepare cost estimates and time schedules to meet
the requirements of the owner.

b. Determine and implement the best construction practices, means, and methods to satisfy the
owner’s requirements for time, cost, and quality.

c. Oversee and manage all of the construction operations into a single, safe coordinated effort.
3. CONSTRUCTION PROFESSIONALS
General Contractors
The general contractor, also known as the prime contractor, enters into a contract with the owner
to deliver the construction project in accordance with the plans and specifications that have been
prepared by the architects and engineers.

They may or may not actually perform any of the actual construction work with their own forces.
When they do, they are said to be doing self-performed work.

Self-Performed Work - Construction work that is performed with the general contractor’s own
forces or labor. This is work that is not subcontracted.
3. CONSTRUCTION PROFESSIONALS
Construction Managers
Construction managers may be employed by construction management firms, general contractors,
architects, engineers, owners, or specialty contractors. The primary responsibility of the
construction manager is to organize the project team to perform the construction management
function.

Specialty Contractors
Specialty contractors are often referred to as subcontractors because they perform their work
under a contract with another contractor (typically the general contractor) to do a portion of the
contractor’s work, as opposed to contracting directly with an owner. These subcontractors, in turn,
may engage other subcontractors. Thus, there can be several levels of subcontracting to a general
contractor.
4. THE BUILDING TRADES
It is important to include the trade workers as part of the construction professionals’ discussion
because, without them, there would be no construction at all. These are the men and women
(plumbers, electricians, ironworkers, and so on) who actually perform the work. These skilled and
semi-skilled workers are the construction industry’s most valuable asset, although they are rarely
recognized for their immense contribution.
SECONDARY PLAYERS
Construction is second only to the restaurant business when it comes to high risk business
endeavors. Four out of five construction companies will go out of business during their first year.
There are many factors for this. One of them is the power that outside parties have over the
entire construction process and outcome. These secondary players, or layers of influence, are
beyond the immediate control of any of the primary players.
A. First-Level Players
This level of influence includes subcontractors, material suppliers, and equipment vendors. This
layer directly influences the outcome of a job in a serious way.

Although this group is often directly connected to the primary players via a subcontract
agreement or a purchase order agreement, they are primarily independent operators and not
under the immediate control of the owner, the architect, or the contractor. And because they are
not under direct control and yet provide vital services, they always add risks to the project
B. Second-Level Players
This level of influence includes insurance companies, utility companies, bonding companies,
building code officials, zoning, labor unions, and manufacturers. Although this level has no
contractual connection or obligation to any of the three primary parties, they hold great influence
over your project.

For instance, a building inspector can shut down operations on a job for even the slightest code
infringement, causing work stoppage for trades not even involved in the infringement.
C. Third-Level Players

This layer of influence includes the courts and attorneys, local government, state and federal
government, trade associations, education and training, bankers, and others. Like the second level
mentioned previously, these parties do not have a direct link to the primary players but do
influence construction projects on a regular basis.

Although the effects are not always immediate, actions and decisions by this group of players can
have a significant impact on the whole industry, which eventually trickles down to the project
level.

For instance, government agencies that adopt policies or create new laws relative to such things
as growth, wetlands, or endangered species are constantly having an impact on the construction
industry.
B. THE INDUSTRY IMAGE
Turning the image of the construction industry around is no easy task. Millions of dollars have
been invested by several construction associations over the past several years in an effort to
change the public’s perception, and it appears to be paying off. The Associated General
Contractors (AGC) has developed an exciting campaign called Construction Futures, an initiative
designed to alter the current perception of the construction industry and to inform and educate
youngsters, their parents, and teachers about the career opportunities that the construction
industry has to offer.

The National Association of Home Builders (NAHB) created a public service campaign called Home
Builders Care to recognize contractors who have contributed millions of dollars in cash, building
materials, supplies, and countless volunteer hours to community charities through local
community service projects.

Another effort, ABCares, is another national community service initiative undertaken by the
Associated Builders and Contractors (ABC) to recognize chapters that contribute significantly to
their communities.
B. THE INDUSTRY IMAGE
a. Technology - As with most industries, advancements in technology have revolutionized the
way that we do business in construction. Software programs are available to assist with almost
every management function in construction. Programs for estimating, scheduling, cost control,
and project administration are common. Projects are managed using web-based “project
integration” programs that allow all members of the team to exchange information, access
building plans and specifications, process change orders, and even view construction activities and
progress via a webcam from thousands of miles away.

Now the project team can conduct constructability reviews and anticipate and address
construction problems before the first shovel of dirt is ever turned on the job site.

Constructability Reviews - A design review process in which experienced contractors and

construction managers work with designers to ensure that the details of the design actually can
be built in an efficient and cost-effective manner. The process entails review of materials,
application, installation techniques, field execution, and building systems.
B. THE INDUSTRY IMAGE
b. Globalization - Today anyone working in the construction industry should anticipate a future
involving an international experience. The world is getting smaller, and the demand for
infrastructure and building programs for roads, dams, power plants, water and sewer facilities,
mass transit, and even housing in emerging and third-world countries is immense.

Individuals pursuing careers in construction management who are interested in the international
market will undoubtedly have the opportunity to track that venture.
B. THE INDUSTRY IMAGE
c. Sustainability - Today, a much greater emphasis is being placed on the environment and the
relationship between our buildings and the communities in which they are constructed.

In recent years, a voluntary, market-driven building-rating system called the Leadership on Energy
and Environmental Design (LEED) program, developed by the U.S. Green Building Council
(USGBC), has been making its way into segments of the construction industry. This program,
which evaluates environmental performance from a “whole building” perspective over a building’s
life cycle, is becoming so popular that many states are requiring LEED certification of its public
buildings.
B. THE INDUSTRY IMAGE
d. Efficiency - Historically the design and construction industry has had the notorious reputation
of being one of the most wasteful and inefficient industries in the United States. However, in 1993
a group of contractors started to apply lean principles, typically associated with manufacturing, to
the construction industry.

Basically, lean principles, originally derived from the management philosophy known as the Toyota
Production System (TPS), are centered on creating more value with less work. In other words, it’s
the elimination of waste in all forms—wasted materials, wasted time, wasted movement, wasted
manpower, and so on.

Lean Principles - Stemming from the Toyota Production System, principles that focus on
creating more value for customers with less work and the elimination of waste. These principles
are now being applied to the construction industry
B. THE INDUSTRY IMAGE
e. Diversity - There is no doubt that the construction industry in the United States is still a white
and male-dominated industry. However, the demand for construction managers is so significant
that the only way the need can be met is by opening the doors to attract the best and the
brightest to join in the effort to take on the building challenges around the world.

f. Collaboration - The Web is no longer a passive place where people idly surf, read listen, or
watch without engaging. Today we use the Web to network together, participate in dialogue, and
collaborate. Facebook, MySpace, Flickr, LinkedIn and Twitter are just a few of the networks people
are using to interact socially and professionally.
REFERENCES
“Construction Management Jumpstart” (2nd ed., 2010), by B. J. Jackson

“A Guide to the Project Management Body of Knowledge” (5th ed., 2013) by The Project Management Institute

“Project Management” (2002), by G. Heerkens

END OF MODULE
Requirements:
Group Project 2 (GP2)
1. Identification of different construction personnel: Base on your theoretical company profile,
make a Table of Organization (Organizational Chart) showing the names, positions and
hierarchy of personnel. Include your company name, logo and other company details.

• Use the following File Name for each submission.

Year-Section_Surname_Given Name MI_Assignment number_Date of Submission

Example:
3-1_De Guzman_Roviel S._A2_March082023

Duration: One(1) week

Requirements:
Group Project 3 (GP3)
1. Make an initial Contract Agreement based on the given two (2) storey residential structure.
• The contract agreement must be in editable format, including total project cost, liquidated
damages provisions, dispute resolution provisions, total number of working days and
payment scheme and other pertinent details of your bid proposal.

• Use the following File Name for each submission.

Year-Section_Group Number_Group project number_Date of Submission
Example:
3-1_Group1_GP2_March082023

Duration: Two (2) weeks

 MODULE 4 – Project Scheduling
CE 16 - Construction Methods and Project Management

Prepared by:
Engr. Roviel S. De Guzman, RMP, MSCM
I. INTRODUCTION
This unit discusses the importance of creating work breakdown structure, bar charts,
critical path method, precedence logic diagrams, scheduling activities, PERT/CPM and
shows how planning provides the central communication that coordinates the work of all
parties of a construction project.

 ESSENTIAL QUESTIONS
1. What are the different types of project scheduling techniques?
2. What is a critical activity?

 INTENDED LEARNING OUTCOMES

1. The students will be able to know different types of project scheduling techniques.
2. Identify what is/are critical activity/ies in a construction project.
A. PROJECT PLANNING AND PROJECT SCHEDULING
Project planning is the process of identifying all the activities necessary to successfully
complete the project. Project scheduling is the process of determining the sequential order of
the planned activities, assigning realistic durations to each activity, and determining the start
and finish dates for each activity.

Project planning and scheduling are often used synonymously because planning and scheduling
are performed interactively.

Planning is more difficult to accomplish than scheduling. The real test of the project
planner/scheduler is his or her ability to identify all the work required to complete the project.
DESIRED RESULTS OF PLANNING
Project planning is the heart of good project management because it provides the central
communication that coordinates the work of all parties.

The most common desired result of planning is to finish the project on time, there are other
benefits that can be derived from good project planning.
DESIRED RESULTS OF PLANNING
1. Finish the project on time
2. Continuous (uninterrupted) flow of work (no delays)
3. Reduced amount of rework (least amount of changes)
4. Minimize confusion and misunderstandings
5. Increased knowledge of status of project by everyone
6. Meaningful and timely reports to management
7. You run the project instead of the project running you
8. Knowledge of scheduled times of key parts of the project
9. Knowledge of distribution of costs of the project
10. Accountability of people, defined responsibility/authority
11. Clear understanding of who does what, when, and how much
12. Integration of all work to ensure a quality project for the owner

Planning is the first step to project scheduling. Planning is a process and not a discrete activity.
PRINCIPLES OF PLANNING AND SCHEDULING
There must be an explicit operational plan to guide the entire project. The plan must include
and link the three components of the project: scope, budget, and schedule.

1. Begin planning before starting work, rather than after starting work

2. Involve people who will actually do the work in the planning and scheduling process

3. Include all aspects of the project: scope, budget, schedule, and quality

4. Build flexibility into the plan: nnclude allowance for changes and time for reviews and
approvals

5. Remember the schedule is the plan for doing the work, and it will never be precisely correct

6. Keep the plan simple, eliminate irrelevant details that prevent the plan from being readable

7. Communicate the plan to all parties; any plan is worthless unless it is known
PRINCIPLES OF PLANNING AND SCHEDULING
The project must be broken down into well-defined units of work that can be measured and
managed. This process starts with the WBS.

The project plan and schedule must clearly define individual responsibilities, schedules,
budgets, and anticipated problems. The project manager should prepare formal agreements
with appropriate parties whenever there is a change in the project.
RESPONSIBILITIES OF PARTIES
The principal parties of owner, designer, and contractor all have a responsible role in project
planning and scheduling. It is erroneous to assume this role is the responsibility of any one
party.

The owner establishes the project completion

date, which governs the scheduling of work for
both the designer and contractor.

The design organization must develop a design

schedule that meets the owner's schedule.

The construction contractor must develop a

schedule for all construction activities in
accordance with the contract documents.
PLANNING FOR MULTIPLE PROJECTS
Many project managers are assigned the responsibility of simultaneously managing several
small projects that have short durations.

A large project is commonly assigned to one

project manager who has no other
responsibilities than management of the single
project at one time.

Regardless of the project size, large or small,

planning and scheduling must be done.
TECHNIQUES FOR PLANNING AND SCHEDULING
The technique used for project scheduling will vary depending upon the project's size,
complexity, duration, personnel, and owner requirements.
Many project managers prefer the bar
chart for scheduling engineering design
work because of its simplicity, ease of use,
and because it does not require extensive
interrelation-ships of activities.

The project manager must use his or her

own judgment and select the method of
scheduling that best defines the work to
be done and that communicates project
requirements to all participants.
TECHNIQUES FOR PLANNING AND SCHEDULING
The technique used for project scheduling will vary depending upon the project's size,
complexity, duration, personnel, and owner requirements.
Program Evaluation Review Technique
(PERT) – is a project management planning
tool to calculate the amount to time it will
take to realistically finish a project. PERT is a
technique of planning and control of time.
(Event Oriented and Probabilistic)

Critical Path Method (CPM) – is a

statistical technique of project management
that manage well defined activities of a
project. CPM is a techniques focused to
control cost and time. (Activity Oriented and
Deterministic)
CREATING THE WORK BREAKDOWN STRUCTURE (WBS)

Figure 3: Sample WBS Decomposed Down Through Work Packages

TYPES OF WORK BREAKDOWN STRUCTURE (WBS)
A WBS structure may be created through various approaches. Some of the
popular methods include the top-down approach, the use of organization-specific
guidelines, and the use of WBS templates. A bottom-up approach can be used to
group subcomponents. The WBS structure can be represented in the following
types, such as:
TYPES OF WORK BREAKDOWN STRUCTURE (WBS)
a. Phase-Based Work Breakdown Structure - Using phases of the project life
cycle as the second level of decomposition, with the product and project
deliverables inserted at the third level. The phase-based WBS displays the
final deliverable on top, with the WBS levels below showing the five phases of
a project (initiation, planning, execution, control and closeout).

b. Deliverable-Based Work Breakdown Structure - Using major deliverables

as the second level of decomposition. In a deliverable-based WBS, the project
phases are divided into project deliverables and work packages.
TYPES OF WORK BREAKDOWN STRUCTURE (WBS)

Figure 4: Sample WBS Organized by Phase

TYPES OF WORK BREAKDOWN STRUCTURE (WBS)

Figure 5: Sample WBS Organized by Phase (2)

TYPES OF WORK BREAKDOWN STRUCTURE (WBS)

Figure 6: Sample WBS Organized by Deliverables

TYPES OF WORK BREAKDOWN STRUCTURE (WBS)

Figure 7: Sample WBS Organized by Deliverables (2)

PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT)
The Program Evaluation and Review Technique (PERT) method of scheduling uses
three durations for each activity and the fundamental statistics to determine the
probability of a project finishing earlier or later than expected. Although the PERT
method is not used extensively in engineering and construction projects, it provides
valuable information for assessing the risks of a schedule slippage of a project.
PROGRAM EVALUATION AND REVIEW TECHNIQUE (PERT)
PERT uses a weighted average of the three times to find the overall project duration.
This average is called the expected time, te, and is found by the following simple
equation:

E = (a + 4M +b) / 6
where te, is the expected time of an activity. The above equation is used to calculate a single duration for
each activity in the PERT network diagram.

A = optimistic time (is the shortest possible time in which the activity could possibly be completed.)

B = pessimistic time (is the longest time the activity could ever require.)

M = most likely time (is the time the activity could be accomplished if it could be repeated many time
under exactly the same conditions. It is the time that it would
take more often than any other time.
NETWORK ANALYSIS SYSTEMS
A network analysis system (NAS) provides a comprehensive method for project planning,
scheduling, and controlling.

Activity - The performance of a task required to complete the project

Network - A diagram to represent the relationship of activities to complete the project.

Arrow Diagram –The relationship between the activities are represented by arrows.
Precedence Diagram – this method shows the activities as nodes.
 NETWORK ANALYSIS SYSTEMS
Basic Definitions for Critical Path Method.

Free Float (FF) - The amount of time an activity may be delayed without delaying the early start
time of the immediately following activity.
FF = ES - EF where the subscript / represents the preceding activity and the subscript / represents
the following activity.

Critical Path - series of interconnected activities through the network diagram, with each activity
having zero, free and total float time. The critical path determines the minimum time to complete the
project.
 NETWORK ANALYSIS SYSTEMS
Basic Definitions for Critical Path Method.

Dummy Activity - An activity (represented by a dotted line on the arrow network diagram) that
indicates that any activity following the dummy cannot be started until the activity or activities
preceding the dummy are completed. The dummy does not require any time.

Duration (D) - The estimated time required to perform an activity. The time should include all
resources that are assigned to the activity.

Early Start (ES) - The earliest time an activity can be started.

 NETWORK ANALYSIS SYSTEMS
Basic Definitions for Critical Path Method.

Early Finish (EF) - The earliest time an activity can be finished and is equal to the early start plus the duration.
EF = ES + D
Late Finish (LF) - The latest time an activity can be finished.

Late Start (LS) - The latest time an activity can be started without delaying the completion date of the project.
LS = LF - D
Total Float (TF) - The amount of time an activity may be delayed without delaying the completion date of the
project.
TF = LF - EF = LS - ES
NETWORK ANALYSIS SYSTEMS
Sample simple precedence diagram
that is presented to illustrate the
time computations for analysis of a
project schedule by the CPM.
DEVELOPMENT OF CPM DIAGRAM FROM THE WBS
The list of basic steps that can be used to guide the process of developing a
network analysis system for project planning and scheduling.

1. Develop a work breakdown structure (WBS) that identifies work items (activities)
a. Consider activities that require time
b. Consider activities that require cost
c. Consider activities that you need to arrange
d. Consider activities that you want to monitor

2. Prepare a drawing (network diagram) that shows each activity in the order it must
be performed to complete the project
a. Consider which activities immediately precede each activity
b. Consider which activities immediately follow each activity
c. The interrelationship of activities is a combination of how the work must be
done (constraints) and how you want the work to be done
DEVELOPMENT OF CPM DIAGRAM FROM THE WBS
The list of basic steps that can be used to guide the process of developing a
network analysis system for project planning and scheduling.

3. Determine the time, cost, and resources required to complete each activity
a. Review work packages of the WBS
b. Obtain input from project team members

4. Compute the schedule to determine start, finish, and float times

a. Perform a forward pass to determine early starts and finishes
b. Perform a backward pass to determine late starts and finishes
c. Determine the differences between start and finish times to determine float
time and critical activities
DEVELOPMENT OF CPM DIAGRAM FROM THE WBS
The list of basic steps that can be used to guide the process of developing a
network analysis system for project planning and scheduling.

5. Analyze costs and resources for the project

a. Compute the cost per day for each activity and for the entire project
b. Compute the labor-hours per day and/or other resources that are required to
complete the project

6. Communicate the results of the plan and schedule a Display time schedule for
activities
a. Display time schedule for activities
b. Display cost schedule for activities
c. Display schedule for other resources
ASSIGNING REALISTIC DURATIONS
A CPM diagram that was
developed from the WBS
shown. Note that each activity
on the CPM is derived from the
work tasks that are shown on
the WBS.

The CPM network diagram

defines the activities, and
sequencing of activities, to he
performed to accomplish the
project;
ASSIGNING REALISTIC DURATIONS
The schedule for the design work is the total time to produce the final drawings,
including the overlap of design calculations and design drafting.
Tasks of Work Package Duration
Project Engineering 5 days
Structural Design 16 days
CADD Operator 9 days
Total Design Days 30 days
COMPUTER APPLICATIONS
There are many CPM computer programs available to perform the numerous
calculations necessary to determine the scheduled time, cost, and resources of
activities.
SCHEDULE CODING SYSTEM

One of the advantages of CPM scheduling by computer methods is the ability to sort
specific activities from the complete list of activities for the project.
COST DISTRIBUTION
The distribution of costs, with respect to time, must be known to successfully
manage a project. In the preceding sections the scheduled early and late starts, and
finishes, were calculated based on the duration and sequencing of activities. A cost
analysis can also be performed by assigning the cost that is anticipated to complete
each activity. The cost of an activity may be distributed over the duration of the
activity.
RESOURCE ALLOCATION FOR DESIGN
Efficient utilization of resources is critical to successful management. The primary
resource during design is the work-hours of the design team. The project manager
depends on the design team to create design alternatives, produce drawings, and
write specifications for the proposed project. To properly coordinate all aspects of the
design effort, the project manager must ensure the correct expertise is available
when needed.
RESOURCE ALLOCATION FOR CONSTRUCTION
During the construction phase, the primary resources are labor, materials, and
equipment. The correct quantity and quality of material must be ordered and
delivered to the job-site at the right time to ensure efficiency of labor. Equipment to
be installed in the project often requires a long lead time from the fabricator. The
project plan should include material and equipment required by the construction
work force.
REFERENCES
“Construction Management Jumpstart” (2nd ed., 2010), by B. J. Jackson

“A Guide to the Project Management Body of Knowledge” (5th ed., 2013) by The Project Management Institute

“Project Management” (2002), by G. Heerkens

“Project Management for Engineering and Construction” (2nd ed., 2000) by G. D. Oberlender
END OF MODULE
Requirements:
Group Project 4 (GP4)

PERT-CPM and Manpower Allocation – provide WBS and PERT-CPM only. For
manpower allocation, create a summary of all required manpower, including
levelling.

• Use the following File Name for each submission.

Year-Section_Group Number_Group project number_Date of Submission
Example:
3-2_Group1_GP4_April062024
Requirements:
QUIZ NO. 2
a. Construction Project Organization and Manpower
b. Planning and Scheduling
CON T R ACT
BON DS A N D
I N SU R ANCES
CE 16 - Construction Methods and Project Management
INTRODUCTIO N
This unit focuses on the importance and usage of Bid
bonds, performance bonds, payment bonds, claims for
payments, contract changes, indemnity of surety, risk
management, construction risks, insurance checklist,
CARI, termination of insurance

ESSENTIAL QUESTIONS
1. What are the different types of contract bonds? What are the
different types of construction insurances?

2. What are the terms and conditions of these bonds and insurances?
CONTRACT BONDS
A “Contract Bond”, also commonly
referred to as a “Construction Bond”, is a
name given to a broad group of surety
bonds that function to guarantee a given
contract is fulfilled.
DIFFERENT TYPES OF
CONTRACT BONDS:

• BID BONDS
• PERFORMANCE BONDS
• PAYMENT BONDS
B ID B ONDS
A bid bond is typically required when the
owner of a construction project wants
some type of assurance from a contractor
that if awarded a job, the contractor will
enter a contract with the owner under the
terms negotiated in the bidding process.
After being awarded a job, the owner will
likely require the contractor to post a
Performance and Payment bond as part of
the contract terms.
PE R F ORMANCE B OND
A Performance Bond guarantees that a
contractor will complete an awarded job
according to the terms of the contract
negotiated with the owner. The bond
becomes payable if an unfortunate
event, such as the contractor becoming
insolvent, prevents the completion of a
job according to the agreed upon terms.
PA YM E NT B OND S
A Payment Bond guarantees a project
owner that a contractor will pay certain
bills including labor and materials for
itself, sub-contractors and suppliers,
which protects an owner from claims or
project delays as a result of a contractors
financial actions. Payment bonds are
often required in conjunction with bid and
performance bonds, especially on medium
to large federally funded projects.
 INSURANCE
Construction insurance is a primary method
of managing risks in the construction
industry. Construction insurance is a practice
of exchanging a contingent claim for a fixed
payment to protect the interests of parties
involved in a construction project.
DIFFERENT TYPES INSURANCES
• Professional Indemnity Insurance
• Product Liability Insurance
• Public Liability Insurance
• Contractors All Risk Insurance
• Latent Defects Insurance
• Plant and Equipment Insurance
 PROFESSIO N AL INDEMNITY INSU RANCE
Professional indemnity insurance
insures against a liability occurring
from professional negligence.
Examples include breaching a
contractual obligation to exercise
reasonable skill, care and diligence
when carrying out design
works.
PRODU CT LIABILITY INSU RANCE
Product liability protects against being
liable for injuries or damage to a
property resulting from products
supplied by a business. Suppliers of
construction equipment (e.g. lifts
and escalators) may be required to
have such insurance, sometimes
instead of professional indemnity
insurance.
PUB LIC LIABILI TY INSU RANCE
This type of insurance covers
liability occurring from death or
personal injury to third parties
other than the insured’s own
employees. It also covers
damage to the
property belonging to
third parties.
CONTRACTORS ALL RISK INSU RANCE
All risk insurance focuses on
covering all physical damage to
works and site materials. This can
be taken out by either the
contractor or the employer, with
all responsibilities associated with
the construction project
attributed to the parties.
LATENT DEFECTS INSU RANCE
Also referred to as decennial
insurance, latent defects
insurance usually lasts for ten
years from when the original
building was constructed.
This cover needs to be arranged in
advance, and it protects the
building owner against the cost of
remedying the building structure
as a result of a defect.
PLANT AND EQUIPMENT INSU RANCE
• Hired-in plant and equipment
insurance – cover for equipment that
you lease and for which you are
responsible if it’s lost or damaged
• Owned plant and equipment
insurance – cover for plant or
equipment that you own that needs
to be replaced following a loss within
UK territory while in transit (other
than by sea or air)
T ERMS AN D
CONDITION OF
B OND S AN D
INSURANCE
BID BOND
OBL I GAT I ONS OF T H E BI D D ER A M O U NT O F T H E B O ND D U R A T IO N O F T H E B O ND
The bidder must agree to enter into a contract the bond amount will typically be a The bid bond will typically be valid
with the project owner if they are awarded the
percentage of the bid price, such as 10%. for a specific period of time, such as
bid. They must also agree to provide any
additional documentation or information
The bond amount may also include a 60 days from the bid submission
required by the bonding company. minimum and maximum amount. date.

CONDITIONS F OR F ORF EITURE IND E M NIFIC A TION NOTIC E OF C LA IM S

If the bidder fails to enter into the contract or
The bidder may be required to The project owner or bonding
provide the required documentation, the bond
indemnify the bonding company for company may be required to
may be forfeited. The bonding company may
also require the bidder to pay any costs any losses or damages incurred as a provide notice of any claims or
associated with the bond forfeiture. result of the bond. disputes related to the bond.
Add audio or record yourself talking

G O VE R NING LA W
over a presentation.

The bid bond contract may specify

the governing law and jurisdiction
for any disputes related to the
bond.
PERFORMANCE CONTRACT BOND
DU R A TION OF B OND A M O U NT O F T H E B O ND OBL IG AT ION S OF T HE PRIN CIPAL
The bond will be in effect for the The amount of the bond is typically set at The principal is obligated to fulfill all the
terms of the contract, including completing
duration of the contract, and a percentage of the total contract value.
the work in a timely manner, within budget,
sometimes for a period of time after For example, a bond may be required for
and according to the specifications and
the contract is completed. 10% of the contract value.
requirements of the obligee.

CL AIMS AGAINST THE B OND I N D E M N IF ICATI ON OF T H E S U R E T Y T E R M IN A T IO N O F T H E B O N D

If the principal fails to fulfill their the principal must agree to indemnify and The bond may be terminated if the
obligations, the obligee can make a hold harmless the surety from any losses or
principal fulfills all their obligations
damages incurred as a result of the
claim against the bond to cover any under the contract, or if the contract
principal's failure to fulfill their
losses or damages incurred as a result. obligations. is terminated for any reason.
Add audio or record yourself talking

P R E M IUM P A Y M E NT
over a presentation.

The principal must pay a

premium to the surety to obtain
the bond.
T E R M S A N D C O N D I T I O N O F PROFESSIONAL INDEMNITY INSURANCE
• Coverage: Professional Indemnity Insurance covers claims made by clients against the insured professional
for financial loss or damages resulting from professional negligence, errors, or omissions.Exclusions:
Professional Indemnity Insurance does not cover intentional or criminal acts, bodily injury or property
damage, fraud, dishonesty, or contractual disputes.
• Limits of Liability: The policy will have a limit of liability that specifies the maximum amount the insurer
will pay for any claims made against the insured professional.
• Retroactive Date: The policy may have a retroactive date that specifies the date from which the coverage is
effective.
• Deductibles: The policy may have a deductible, which is the amount that the insured professional is
responsible for paying before the insurance coverage kicks in.
• Insured's Obligations: The insured professional is obligated to provide accurate and complete information
to the insurer, comply with all policy terms and conditions, and cooperate in the investigation and
settlement of any claims.
• Policy Renewal: The policy is usually renewed annually, and the insured professional must pay the
premium to maintain coverage.
TERM S AND CONDITION OF PROFESSIONAL INDEMNIT Y INSURANCE

• Advance Payment of Defence Costs

• Assisting with Claims
• Cancellation
• Cessation of Entities (Runoff Cover)
• Claims Conduct
• Claims Notification
• Claims Settlement
• Governing Law
• No Admission of Liability
• Other Insurance
• Sanction Clause
• Territorial and Jurisdictional Limits of Cover
TER MS AN D C ON DI TI ON OF PUB LI C LI AB I LI TY I N S UR AN C E
• COVERAGE • CLAIMS
• LIMIT OF INDEMNITY • DISCHARGE OF LIABILITIES
• EXCESS • REASONABLE CARE
• EXCLUSIONS • INSPECTION OF PROPERTY
• JOINT INSUREDS • ADJUSTMENT OF PREMIUM
• NOTICES • PREMIUM PAYMENT WARRANTY
• CANCELLATION NOTICE CLAUSE
• OTHER INSURANCE • STATUTORY REQUIREMENTS
• SUBROGATION • DISPUTES
• DUTY OF DISCLOSURE
T E R MS A N D C O ND IT ION O F P R O D UC T LIA BILITY I N S U R A NC E

• Duty of Care
• Passenger Lifts, Boilers and Pressure Vessels
• Premium Adjustment
• Cancellation
• Premium Payment Warranty
• Premium Payment Condition Precedent (For New Policies only)
• Contracts (Rights Of Third Parties) Act 2001
• Contract Law
• Sanction Clause
TERMS AND CONDITION O F LATE NT D E F E C TS INSU R ANC E
• Policy Coverage Inception • Material Change in Risk
• Transfer of Ownership of the Insured Property • Reasonable Precautions
• Actual Value deviating from the Estimated Value • Documentation and Inspections
• Sum Insured of the Insured Property • Claims
• Full Insurance • Subrogation
• Premium • Mediation
• Unity of Policy • Arbitration·Contribution
• Due Observance of Policy Terms • Applicable Law and Jurisdiction
• Technical Inspection Service • Policy Cancellation Clause
• Basis of Indemnity • Sanctions Clause (LMA3100)
T E R M S A N D C O N D I TI ON O F C O N T RACT ORS A LL R I S K I N S U R ANCE
• The due observance and fulfillment of the terms of this Policy in so far as they relate to anything to be done
or complied with by the Insured and the truth of the statement and answers in the questionnaire and
proposal made by the Insured shall be a condition precedent to any liability of the company.
• The Schedule and the Section(s) shall be deemed to be incorporated in and form part of this Policy and
expression ‘this Policy’ wherever used in this contract shall be read as including the Schedule and the
Section(s). Any word or expression to which a specific meaning has been attached in any part of this Policy
or of the Schedule or of the Section(s) shall bear such meaning wherever it may appear.
• The Insured shall at his own expense take all reasonable precautions and comply with all reasonable
recommendations of the Company to prevent loss, damage or liability and comply with statutory
requirements and manufacturers' recommendations.
• Representatives of the Company shall at any reasonable time have the right to inspect and examine the risk
and the Insured shall provide the representatives of the Company with all details and information necessary
for the assessment of the risk.
• The Insured shall immediately notify the Company by Telegram and in writing of any material change in the
risk and cause at his own expense such additional precautions to be taken as circumstances may require and
the scope of cover and/or premium shall, if necessary, be adjusted accordingly.
T E R M S A N D C ON D IT ION O F C O N T R ACT OR S A L L R I SK I N SU R ANCE
• In the event of any occurrence, which might give rise to a claim under this Policy, the Insured shall –
• Immediately notify the Company by Telephone or Telegram as well as in writing giving an indication as to
the nature and extent of loss or damage;
• take all steps within his power to minimise the extent of the loss or damage;
• preserve the parts affected and make them available for inspection by a representative or Surveyor deputed
by the company;
• furnish all such information and documentary evidence as the Company may require;
• inform the police authorities in case of loss or damage due to theft or burglary
• The Insured shall at the expense of the Company do and concur in doing and permit to be done all such acts
and things as may be necessary or required by the Company in the interest of any rights or remedies, or of
obtaining relief or indemnity from parties (other than those Insured under this Policy) to which the
Company shall be or would become entitled or subrogated upon their paying for or making good any loss or
damage under this Policy, whether such acts and things shall be or become necessary or required before or
after the Insured's indemnification by the Company.
T E R M S A N D C ON D IT ION O F C O N T R ACT OR S A L L R I SK I N SU R ANCE
• If any dispute or difference shall arise as to the quantum to be paid under this Policy (liability being otherwise admitted)
such difference shall independently of all other questions be referred to the decision of a sole arbitrator, to be appointed
in writing by the parties to or, if they cannot agree upon a single arbitrator within 30 days of any party invoking
Arbitration, the same shall be referred to a panel of three Arbitrators comprising of two Arbitrators - one to be appointed
by each of the parties to the dispute/difference, and the third Arbitrator to be appointed by such two Arbitrators and
arbitration shall be conducted under and in accordance with the provisions of the UAE Arbitration law & procedures.
• If a claim is in any respect fraudulent, or if any false declaration is made or used in support thereof, or if any fraudulent
means or devices are used by the Insured or any one acting on his behalf to obtain any benefit under this Policy, or if a
claim is made and rejected and no action or suit is commenced within three months after such rejection or, in case of
arbitration taking place as provided therein, within three months after the Arbitrator or Arbitrators or Umpire have
made their award, all benefits under this Policy shall be forfeited.
• If at the time any claim arises under this Policy there be any other insurance covering the same loss, damage or liability
the Company shall not be liable to pay or contribute more than their rateable proportion of any claim for such loss,
damage or liability.
• This insurance may be terminated at the request of the Insured at any time in which case the Insurers will refund
appropriate premium amount subject to the following conditions -
TERMINATION OF INSURANC E
• An insured may terminate an insurance policy at any time. Generally, it
requires that the insured express intent to cancel the policy. This may
include notifying the insurer in writing or discontinuing payment of
premiums.
• If the insured stops paying the insurance premiums, the insurer must
provide the insured with notice of its intention to cancel the policy.
• If the insurer fails to provide notice within the statutory period, the
insured may be able to resume her insurance contract by resuming
payments. An insurer is generally limited by statute in its ability to cancel
a policy
RISK
MA NAGEMENT
 R IS K
T HE T HREE ID E NTIFIC A TION
FOUND AT ION A L
ST EPS
COMMON T O R IS K
ALL RISK Q U A NTIFIC ATION
M ANAGEM E N T
APPROACHES
R IS K M ITIG A TION
S T EPS IN RISK
MA NA G EMENT
 P R E B ID
R IS K S

D E S IG N
IDENTIFYING RISK R IS K S

CONSTRUCTION
The purpose of this first step in the risk
RISKS
management process is to identify the risks
that could produce either an increase in cost to
the project, a delay in schedule, or a loss of P O L I T I C AL/L EGAL/
RE GUL AT O RY
profit. The job of the construction manager is to RI S KS
anticipate and unveil any potential risks that
may derail their project or cause harm to any FINA NC ING
one of the project participants before the R IS K S
project starts.

ENV I R ONMENT AL
R I SKS
 Bid the project but increase the profit
margin or add contingencies to
account for the added risk

PREBID RISK S Bid the project but joint

It is in the prebid stage that the venture with another
contractor first considers whether the contractor partner to share
overall risks associated with the the risks
project are acceptable. By reviewing
the basic parameters of the project
Reject the project and not
(contract requirements, size,
submit a bid because the
location, budget, and so on), the
contractor will assess the various
risks are unacceptable
risks and make one of three decisions:
Most contractors will formalize this
prebid risk assessment by looking
at each risk factor and determining
whether it is an acceptable risk or
an unacceptable risk—and to what
degree.

For example, by using a scale

whereby 0 equals a low risk
(acceptable) and 3 equals a high
risk (unacceptable), the contractor
can systematically determine
whether to bid the project.
 If the constructor decides not to pursue the contract, then all the additional risks
associated with the project are a moot point. However, if after proper analysis and
assessment the decision is to go forward with the bid, then there are several other
types of risks to consider.
D E SIG N R ISK S
In some instances, the builder is
contractually responsible for the
design, and in those cases it is
critically important that design
risks are given serious review and
consideration in the overall risk
mitigation plan. But even when this
is not the case, there are many
types of design risks that will
impact the contractor’s ability to
deliver the project on time, within
budget, and within the quality
specifications expected by the PAGE
owner.
CONST R UCTION R ISK S
• Construction risks are a bit easier for contractors to identify, but they should all still
be laid out in a checklist to make sure that a discussion takes place to address them.
Construction risks run the gamut from factors where the contractor has absolutely
no control, such as the weather, to factors where they have significant control, such
as safety.

• They are generally associated with the management of materials, manpower, and
equipment. Each construction project is different, and the construction manager
should focus on those construction risks that will have the greatest impact on
project cost, schedule, quality, and safety.
POL IT ICAL /L EGAL/REGU LATORY R ISK S
• Political, legal, and regulatory risks are often classified as third-party risks and are
usually the ones that the contractor has the least amount of control over. And
although the builder may be fully aware that the risks exist, there is no way to
accurately predict how various jurisdictions and agencies will act. Changes in
legislation, regulations, building codes, and permitting procedures can happen at
any time

• Any public project will have far more agency involvement and bureaucratic
oversight than a private job.
F INA NCING R ISK S
• Financing risks must be considered from several perspectives.

1. There are the risks associated with the contractor’s own financial position.
2. You have to be aware of the financial strength of all of your subcontractors and
suppliers, especially the ones with the highest value or most critical work items
(mechanical, electrical, structural steel, and so on). If they get into financial trouble,
your project is in financial trouble as well.
3.Third, you have to look at the project owner’s financial picture. You always want to
make sure the funding for any project you take on is secured.
4. Last, the construction manager must be acutely aware of the economic environment
at any given time. A contractor’s financial status can turn on a dime if economic
conditions take a nose-dive. It is no surprise that financial risks are one of the most
important indirect factors affecting the health of the construction market.
E NVIR ONMENTAL R ISK S
• Environmental risks are
similar to political, legal, and
regulatory risks in that the
contractor generally has
very little control over how
any given agency or
environmental authority
might act as they review
regulatory compliance
requirements.
Q U A NT IFYING R ISK S
• Once the potential risks have been identified, the next step is to analyze each one and determine
what the likelihood or probability is that it will occur. The next step is to predict what impact that
occurrence will have on the construction cost, schedule, quality, safety, client relationship, or
contractor’s ability to fulfill the obligations of the contract. When any of these risks occurs, the
consequences will usually involve the following: the need to perform additional work, the need to
redo work that has already been done, delays to the schedule, quality defects, cost overruns, and
potential litigation.

• To focus attention on the risks that potentially could have the greatest negative
influence on a project, the construction manager must be able to quantify and
rank each risk. A common method for doing this is to assign numerical values to
each factor relative to probability and impact. Once these numbers are assigned,
the CM can then calculate an overall risk rating for each factor.
 • Determining the probability index
The probability index represents the likelihood that the risk will occur based upon the
evaluator’s expertise, experience, and judgment. A numerical score from 1 to 3 is assigned to
each risk factor as follows:
• High risk (3) when its probability of occurrence ranges from 75 per cent to 100 percent
• Medium risk (2) when its probability of occurrence ranges from 50 percent to 75 percent
• Low (1) when its probability of occurrence is less than 50 percent
• Determining impact potential
The impact potential of each risk factor is based upon the evaluator’s expertise, experience,
and judgment. A numerical score from 1 to 3 is assigned to each risk factor as follows:
• High impact (3)
• Medium impact (2)
• Low impact (1)
Once probability and impact scores are assessed, a risk rating can be determined by
multiplying the probability score by the impact score:

Probability × Impact
= Risk rating
M IT IG ATING R ISK S
• The concept behind risk mitigation is to anticipate as
many negative influences to your project plan as you
can so you can initiate actions and implement
strategies to head them off. This isn’t rocket science
I’m talking about—it is simply good planning and
common sense. A number of strategies can be
implemented, and it is likely that a combination of all
of them will be put to use on any given project.
R ISK M IT IG ATION ST R A T EGIES
The risks that pose the
greatest threat are the ones
that you want to focus your
risk mitigation strategy on. It
is often helpful to chart risk
ratings to establish a visual
display of where the greatest
danger is as you plan your
project and strategize to
mitigate negative influences.
Risk Retention
• When the contractor is in the best position to control the situation, they can then afford to absorb the potential
economic loss exposure. This is why you see some contractors investing in and buying into concrete plants and
structural fabrication facilities. This gives them the control they need to supply their own projects to meet critical
schedule deadlines.
Risk Avoidance
• Risk avoidance is just that—don’t take the project on to begin with! Or in some cases, there may be parts of a project
that you decide are too risky.It is usually a business decision, and many different factors can lead a contractor in this
direction at any given time. It can be as simple as a company already having too much work and their inability to take
on anymore, or it can be a fear that the funding for the project is going to dry up before the work is completed.
Risk Abatement
• This risk management strategy focuses on reducing the loss potential of any given risk factor in terms of frequency or
severity. Risk abatement is often used in conjunction with other risk management strategies, since using this risk
management method alone will not eliminate risk altogether.
Risk Transfer
• Risk transfer is the shifting of risks from one party to another. This can be done in several ways. One of the most
common ways, of course, is by subcontracting work to specialty contractors who have expertise in an area (for
example, plumbing, electrical, curtain walls, and so on).
Risk Allocation

• Risk allocation is the sharing of the risk exposure with other parties. This is usually a
business decision made at the onset of the risk analysis at the prebid stage. An example is
when one contractor partners with another contractor in a joint venture. This approach is
being applied more and more, especially on large, complex projects.

• Every construction company will have a different culture when it comes to their
relationship and comfort with risk. Some companies are very risk-oriented, whilem others
are very risk-adverse. But regardless of their level of risk acceptance, each company will
have to come to terms with their own risk appetites when reviewing projects and
determining which risk mitigation strategies is best for them.
T HE R ISK M IT IGAT ION PL A N
• Once you have made the effort
to thoroughly analyze all of the
risks that may impact your
project, it is time to put
together a full-blown risk
mitigation plan that addresses
every aspect of risk evaluation,
as shown here. In addition to
probability, impact, and risk
rating analysis, the risk
mitigation plan will also show
potential consequences and
mitigation strategies.
T HE R ISK M IT IGAT ION PL A N
THE R ISK M A NAGEMEN T T E A M
• As you advance in your construction management
career, evaluating risks becomes more crucial. Risks
associated with projects can affect the success of a
construction company, and managers often consult
senior management and legal teams before pursuing
large or unusual projects. Firms have specific rules on
when senior management and legal teams should be
involved, usually linked to the project's dollar value.
End of Module