CONSTRUCTION PROJECT
Organized process of constructing, renovating, or PROJECT CHRONOLOGY
retrofitting physical structures 1. Conceptual Planning
Characteristics: o Decisions on design, site, cost, and
o Defined goals and objectives schedule
o Unique, complex, and diverse o Permits and applications begin
o Interdependent tasks 2. Schematic Design
o Definite start and end time o Initial design with material/method
o Meets owner expectations and considerations
requirements o Preliminary estimate and schedule
o Not routine work 3. Design Development
o Involves significant risk o Final design phase
o Work package determination
PROJECT STAGES 4. Construction
1. Definition and Planning o Mobilization, milestones, substantial
o Establish project goals and objectives completion, punch list, and project
o Define project characteristics close-out
2. Design
o Architectural and engineering design PROJECT RISKS
o Final working drawings and Bid – Proposal by a contractor/service provider
specifications with work details, timeline, and cost
o Research materials, equipment, and Risk Types:
design o Project Site Risks – Neighbors,
3. Procurement regulatory concerns, economic
o Ordering and delivering required goods conditions
and services o Project Risks – Complexity, technology,
4. Construction materials, finishes
o Execution of construction work based o Process Risks – Funding,
on plan and design preconstruction info, project unknowns
o Owner Organization Risks – Decision-
CONSTRUCTION PROJECT CATEGORIES making process, organizational
1. Residential Buildings structure
Housing construction: single-family homes,
apartments, townhomes, condos, dormitories, CONTINGENCY
nursing homes Set funds/time for unforeseen risks or delays
Typically designed by engineers and architects Steps in Developing a Contingency Plan:
Single-family homes may be designed and built 1. Identify potential risks
by the same company 2. Assess probability and impact
2. Commercial Buildings 3. Develop a response plan
Includes schools, hospitals, shopping malls, 4. Assign responsibilities
stadiums, theaters, and skyscrapers 5. Monitor and update the plan
Some projects funded by businesses, others by Here's a well-organized reviewer in bulleted form for
the government Contract and Specification (CE-3202, Group 2):
3. Infrastructure and Heavy Constructions
Includes highways, tunnels, bridges, pipelines, CONTRACT AND SPECIFICATION REVIEWER
and drainage systems
1. CONTRACT
Public infrastructure developed and operated by
A contract is a legally enforceable agreement
the government
specifying rights and obligations between two or
Types:
more parties.
o Soft Infrastructure – Institutions
Construction Contract
supporting the economy
A contract between a client and a contractor for
o Hard Infrastructure – Physical systems a construction project.
for an industrialized economy Specifies the scope of work, cost, timeline,
o Critical Infrastructure – Assets subcontracting rights, and work orders.
essential for economic functioning 2. COMMON CAUSES FOR BREACH OF CONTRACT
4. Industrial Projects Defective Performance – Work is done but does
Facilities for production, storage, mining, power not meet required standards.
generation Schedule and Delay Issues – Work is not
Types: completed within the agreed time frame.
o Heavy industrial buildings Failure to Perform – A party does not fulfill the
o Warehouses contract obligations.
o Data centers 3. FOUR ELEMENTS OF A VALID CONTRACT
o Cold storage buildings 1. Offer – A party promises to do or not do
o Manufacturing and flex buildings something in the future.
2. Acceptance – Agreement to the offer through 1. Express – Terms are explicitly stated and
words, deeds, or actions. understood by all parties.
3. Consideration – Value exchanged that motivates 2. Executed – Includes warranties for project
contract participation. completion.
4. Legality – The contract must comply with legal 3. Conditional – Contract takes effect only if certain
regulations and public policy. conditions are met.
Importance of a Contract Agreement
CONSTRUCTION CONTRACT AGREEMENT Defines compensatory damages in case of
Defines the scope and terms of a construction contract breach.
project. Ensures certainty and clarity in construction
Agreement between the contractor and the projects.
hiring party. Establishes duties and obligations of all parties.
Key Sections in a Construction Contract Helps avoid contract disputes.
Scope of Work – Details the specific work to be
done. 6. CONSTRUCTION SPECIFICATIONS
Start and Completion Dates – Defines project Specifications detail materials, work
timeline. requirements, and installation methods.
Project Participants – Identifies involved parties. Help ensure correct work, minimize disputes,
Labor & Material Costs – Outlines expenses and and improve project coordination.
payments. Types of Construction Specifications:
Communication Methods – Specifies how 1. Prescriptive Specification – Provides step-by-
parties will communicate. step instructions on materials and methods.
Change Procedures – Defines how changes to 2. Performance Specification – Focuses on
the contract will be handled. operational requirements and functionality.
Dispute Resolution – Establishes methods for 3. Proprietary Specification – Specifies a particular
resolving conflicts. brand or product.
How a Construction Contract Agreement Works
Project Description – Overview of the project 7. CONSTRUCTION PROJECT ORGANIZATION
and its objectives. Defines roles and responsibilities within the
Contract Price – Specifies total cost and any project.
modifications. Ensures effective communication and
Payment Basis – Defines payment terms, coordination among all stakeholders.
penalties, and invoicing procedures.
Schedule/Calendar – Can be represented by a
Gantt Chart, bar chart, or CPM.
Document List – Includes drawings,
specifications, and other documents.
Construction Scope – Specifies measurable
construction activities.
Contract Conditions & Responsibilities – Covers
liens, penalties, and arbitration rules.
Contract Laws – Details legal requirements,
insurance, and completion terms.
4. TYPES OF CONSTRUCTION CONTRACT AGREEMENTS
All contracts should:
1. Be in writing.
2. Clearly describe the product/service.
3. Be understood by both parties.
4. Outline the services contracted.
5. Include a termination policy.
6. Clearly state financial terms.
Types of Construction Contracts
1. Lump-Sum/Fixed Price Contract – Contractor
agrees to complete the project for a fixed price.
2. Cost Plus Contract – Client pays actual cost of
labor and materials plus contractor's profit.
3. Time and Materials Contract – Payment is based
on labor hours and material costs.
4. Unit Price Contract – Cost is based on per-unit
pricing of specific work elements.
5. CONTRACT MODIFICATIONS
Contracts may be modified based on project
needs.
Types of Contract Modifications:
