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CONTRACTS AND
SPECIFICATIONS
C AT H Y C A R D O Z A
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CONTRACTS
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What is the Definition of a

Contract?
• A contract is basically an agreement
between two parties creating a legal
obligation for both of them to perform
specific acts.
• In order for the contract to be
enforceable, each party must
exchange something of value (called
“consideration”).

• They may be either oral or written,

though courts prefer that agreements
be put in writing.
4 What are the Requirements for a Valid
Contract?

Mutual Assent: Each party must have a shared

understanding regarding what the subject matter of
the contract is.

Offer and Acceptance: One party must make an

offer by clearly communicating their intent to be
bound in a contract. Likewise, the other party must
render their acceptance in clear terms.

Consideration: This where both parties mutually

exchange something of value in order to make the
agreement binding.
Sometimes contracts can be
enforced in a one-sided promise where only one party
renders consideration.
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How can a Contract be

Breached?
The entire formation of the contract begins with
negotiations and may undergo several modifications
before a final agreement is reached.

This means that there are several points in time

when the contract may be breached. A breach of
contract means that one or both parties has failed to
perform their duty.

A breach may either be total or partial, and each will

yield different legal consequences.
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What is a Construction
Contract?
A construction contract provides a legal binding
agreement, for both the owner and the
builder, that the executed job will receive the
specific amount of compensation or how the
compensation will be distributed.

Construction contract types are usually defined

by the way, the disbursement is going to be
made and details other specific terms, like
duration, quality, specifications, and several other
items.
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SPECIFICATIONS
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What is the Definition of a

Specification?
• A specification often refers to a set
of documented requirements to be
satisfied by a material, design,
product, or service.

• A specification is often a type

of technical standard.
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Specification for Construction

Construction specifications, also known, as specs,

detail the work and workmanship needed to
complete a construction project.

Dictionary of Architecture & Construction

specification is, “a written document

describing in detail the scope of work, materials
to be used, methods of installation, and quality of
workmanship for a parcel of work to be placed
under contract; usually utilized in conjunction
with working (contract) drawings in building
construction.”
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Main Types of Construction
Specifications
Prescriptive: Provides details on the types of materials
and installations needed to complete a project.
Additionally, prescriptive specifications also describe how
to measure installations to ensure that they were up to
project quality and standards.

Performance: Describes the operational requirements.

Fundamentally, the performance specifications should
describe to the contractor what is needed for the final
product and how it should essentially function once
completed.

Proprietary: Although not as common as prescriptive

and performance, proprietary specifications are used if
only one specific product can be used for an installation.
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CONSTRUCTION
PROJECT
ORGANIZATION
C AT H Y C A R D O Z A
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What Is an Organization?

An organization is a group or groups

of individuals who share the purpose of
accomplishing a goal. Each
organization is defined by the culture
and style, called norms, that they
create.

Cultural norms are shaped by the

experiences of the organization and will
develop over time. The experiences
can be items such as risk
management, diversity, values,
leadership, or accountability.
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Construction Project Organization

A construction project organizational structure has to

help ensure on-time project completion within the set
budget.

You have to decide how best to assign responsibility

for scheduling and cost control while making sure the
project's working-level teams carry out the work in the
right sequence and according to the specifications.

An effective project organization leaves project team

members free to decide on the technical aspects of
their work while ensuring that they act within the
project's time and cost constraints.
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Framework
Organization of a project differs from
that of an operating company because
a project has a limited duration.
Employees making up the project team
come from a company's general work
force and return there after the project
is finished.

Those involved in the project focus on

getting the work done according to the
project plan, satisfying specific cost,
scheduling and quality objectives
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Functional

Project managers need to control the project's

scope and costs, as well as handling project
scheduling.

The project manager assigns responsibility for these

functions to key people, and the organizational
structure gives them direct access to the working-
level teams carrying out the work.
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Technical
Construction projects include a
technical component that requires
technical training, expertise and
professional qualifications.

The project manager organizes the

working-level teams to carry out
specific tasks, such as drywall or
plumbing, in the right sequence.

The functional units track progress,

schedule the work and issue reports
back to the project manager.
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Quality

Quality control is a specialized function that usually

has an independent structure parallel to the project
organization.

Two requirements for quality control are that the

quality manager reports directly to project
management and that the personnel from the quality
control department have direct access to everyone
carrying out work on the project.
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PLANNING AND
SCHEDULING
(PERT/CPM)
C AT H Y C A R D O Z A
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1.2 Planning, Scheduling & Control
Planning, Scheduling (or organising) and Control are considered to be basic
Managerial functions, and CPM/PERT has been rightfully accorded due importance in the
literature on Operations Research and Quantitative Analysis.

PERT/CPM provided a focus around which managers could brain-storm and put
their ideas together. It proved to be a great communication medium by which thinkers and
planners at one level could communicate their ideas, their doubts and fears to another level.

Most important, it became a useful tool for evaluating the performance of

individuals and teams.

There are many variations of CPM/PERT which have been useful in planning costs,
scheduling manpower and machine time. CPM/PERT can answer the following important
questions:
• How long will the entire project take to be completed? What are the risks involved?
• Which are the critical activities or tasks in the project which could delay the entire project
if they were not completed on time?
• Is the project on schedule, behind schedule or ahead of schedule?
• If the project has to be finished earlier than planned, what is the best way to do this at
the least cost?
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1.3 The Framework for PERT and CPM

I. Define the Project and all of it’s significant activities or tasks. The Project (made up of several
tasks) should have only a single start activity and a single finish activity.

II. Develop the relationships among the activities. Decide which activities must precede and
which must follow others.

III. Draw the "Network" connecting all the activities. Each Activity should have unique event
numbers. Dummy arrows are used where required to avoid giving the same numbering to
two activities.

IV. Assign time and/or cost estimates to each activity

V. Compute the longest time path through the network. This is called the critical path.

VI. Use the Network to help plan, schedule, monitor and control the project.
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The Key Concept used by

CPM/PERT is that a small set of
activities, which make up the
longest path through the activity
network control the entire
project.

If these "critical" activities could

be identified and assigned to
responsible persons,
management resources could
be optimally used by
concentrating on the few
activities which determine the
fate of the entire project.
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Non-critical activities can be replanned, rescheduled
and resources for them can be reallocated flexibly,
without affecting the whole project.

Five useful questions to ask when preparing an

activity network are:

• Is this a Start Activity?

• Is this a Finish Activity?
• What Activity Precedes this?
• What Activity Follows this?
• What Activity is Concurrent with this?
24 CPM: How to Use the Tool
As with Gantt Charts, the essential concept
behind Critical Path Method is that you
cannot start some activities until others are
finished.

These activities need to be completed in a

sequence, with each stage being more-or-
less completed before the next stage can
begin. These are "sequential" activities.

Other activities are not dependent on

completion of any other tasks. You can do
these at any time before or after a particular
stage is reached. These are non-dependent
or "parallel" tasks.
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Drawing a Critical Path Analysis Chart

Use the following steps to draw a CPA Chart:

Step 1. List All Activities in the Plan

For each activity, show the earliest start date, estimated length of time it will take,
and whether it is parallel or sequential. If tasks are sequential, show which stage
they depend on.
For the project example used here, you will end up with the same task list as
explained in the article on Gantt Charts (we will use the same example as with
Gantt Charts to compare the two techniques). The chart is repeated in figure 1
below:
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Step 2. Plot the Activities as a Circle and Arrow Diagram

Critical Path Method is presented using circle and arrow diagrams.

In these, circles show events within the project, such as the start and finish of
tasks. The number shown in the left-hand half of the circle allows you to identify
each one easily. Circles are sometimes known as nodes.

An arrow running between two event circles shows the activity needed to complete
that task. A description of the task is written underneath the arrow. The length of
the task is shown above it. By convention, all arrows run left to right. Arrows are
also sometimes called arcs.

An example of a very simple diagram is shown below:

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Where one activity cannot start until another has been completed, we start the
arrow for the dependent activity at the completion event circle of the previous
activity. An example of this is shown below:
Here the activities of "Select Hardware"
and "Core Module Analysis" cannot be
started until High Level Analysis has been
completed. This diagram also brings out a
number of other important points:
• Within Critical Path Analysis, we refer to
activities by the numbers in the circles at each
end. For example, the task "Core Module
Analysis" would be called activity 2 to 3. "Select
Hardware" would be activity 2 to 9.

• Activities are not drawn to scale. In the diagram

above, activities are 1 week long, 2 weeks long,
and 1 day long. Arrows in this case are all the
same length.

• In the example above, you can see a second

number in the top, right hand quadrant of each
circle. This shows the earliest start time for the
following activity. It is conventional to start at 0.
Here units are whole weeks.
29 PERT (Program Evaluation
and Review Technique)

PERT is a variation on Critical Path Analysis that

takes a slightly more skeptical view of time
estimates made for each project stage.

To use it, estimate the shortest possible time each

activity will take, the most likely length of time, and
the longest time that might be taken if the activity
takes longer than expected.

.
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The PERT method employs simple statistic calculations. It uses three-time

estimations.

Optimistic Estimate: The shortest time required to complete the task.

Pessimistic Estimate: The longest time required to complete the task.
Most Likely Estimate: The most possible time (probable duration) required to
complete the task.

Expected time is calculated by the help of the formula below:

Expected time = ( Optimistic + 4 x Most likely + Pessimistic)

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31 The PERT Method
Implementation Steps
1. List the activities and milestones 4. Estimate the activity durations
The first step is to determine the tasks The PERT Method uses three duration
required to complete the project. estimates for activities which are;
• Optimistic Estimate
2. Determine the sequence of activities • Pessimistic Estimate
The second step is to determine the order • Most Likely Estimate
of the activities. Which activity is By the help of three estimates, expected
predecessor which one is the successor. It duration is calculated.
Is easy to determine the sequence of some
activities however the sequence of some 5. Determine the critical path
tasks may require deep analysis. The critical path is the longest path of the network
diagram. Forward and backward pass calculations
3. Build a network diagram is used to determine the critical path.
The third step is to create the network
diagram by the help of a software or by
hand and place the activities on the
diagram.
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Key Points An effective Critical Path Analysis

can make the difference between
• Critical Path Analysis is an effective and powerful success and failure on complex
method of assessing:
projects. It can be very useful for
• What tasks must be carried out.
assessing the importance of
• Where parallel activity can be performed.
• The shortest time in which you can complete a problems faced during the
project. implementation of the plan.
• Resources needed to execute a project.
• The sequence of activities, scheduling and timings
involved. PERT is a variant of Critical Path
• Task priorities. Analysis that takes a more
• The most efficient way of shortening time on urgent skeptical view of the time needed to
projects.
complete each project stage.
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Key Differences Between the PERT Method and
the CPM (Critical Path Method)
Below are some key differences between the PERT Method and the
Critical Path Method

– In CPM Method activity durations are well defined but in PERT

Method , time estimations are uncertain.

– CPM is a method of control of time and costs, however, PERT is a

technique of planning and control of time.

– There are three estimates in PERT such as optimistic, pessimistic

and most likely. In CPM Method, there is only one estimate.

– In PERT diagram, only FS relationship type is applicable. In CPM

diagram 4 relationship types (FS,SS,SF,FF) can be applicable.

– PERT is event-oriented however, CPM is start and completion

oriented.

– PERT is more applicable to research and development projects

rather than CPM.
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