The Most Significant Concepts of Project Management in Building Construction

Project management in building construction is a complicated field of work where certain responsibilities overlap with others and the role is not only restricted to managing resources. It involves lot more. Ask any project manager of a construction company and they will tell you that there are other responsibilities and that does not provide them any respite. To be able to shoulder these responsibilities, the manager requires knowledge of mediation, business, law, finance and lot more.

However, the basic knowledge that can be drawn from working in the company is regarding obtaining construction management projects. There is a basic method of obtaining construction projects. The project owner will initiate bidding for his project to contractors and subcontractors. Followed by this the cost estimation is done from blueprints and material take-offs. This cost is the one that the owner has to bear in order to get his project completed.

To start from the very first there are 2 kinds of bids. They are:

• Open Bid- All contractors are invited in an open bid to submit tenders. It is typically promoted through advertisements. Since it is open, this kind of bid id invited for public projects.
• Closed Bid- The case is just the opposite for closed bids. These are generally encouraged for private projects and the owner sends invitations to chosen contractors for this bid. These are held privately as well.

After the receipt of so many bids, the owner follows certain steps to choose a particular contractor to work for him/her. These steps depend on some factors, they are:

1. Price Based- Price based selection is done where the main factor is low bid. The contractor with the lowest quote wins the bid and works on the project.
2. Qualification Based- Qualification is the sole factor for this kind of selection. An RFQ or Request for Qualifications is asked by the owner summoning the bid. The qualification includes management plans, contractor’s experience, budget, schedule performance and project organization.
3. Value Based- This includes the best qualifications combined with the best price for hiring the contractor.

After the selection of contractors, payment contract is signed by both parties. There are 4 different categories in this. They are:

• Unit Price- This type of contract is signed by both the parties in which none of them can estimate the price beforehand. As a result the owner provides a unit price to restrict the expenditure.
• Maximum Price Guarantee- This is almost similar to the cost-plus fee contract except that the price is set from the beginning and it cannot exceed the total cost or the fee.
• Cost-Plus Fee- Under this contract, the owner must pay the entire cost along with a fixed percentage fee of the entire cost to the contractor. This is considered to be the best form because any extra costs are covered for the contractor.
• Lump Sum- This is the commonest type of contract. Both the parties agree on a fixed cost for the project and that must be paid irrespective of whether the project is a success or a failure. In fact, the money must be paid even if the initial price exceeds.

All these factors are important and the project manager must know them. Project management in Sydney also follows these steps to make the process a smooth one. A project manager must know regarding these steps and sometimes also contribute in these for the sake of the company.