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    Lecture 1

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    Abadit Tadesse
    Here are a few key points about conditions that might make it advisable for the government to use the force account method of construction: - When the scope of work is small and using contractors would incur high overhead and administrative costs relative to the project size. Directly employing labor may be more cost effective. - When security or confidentiality is essential. Using government employees allows for tighter control over who accesses the site and what information is disclosed. - When the work must be done urgently or within a very tight timeframe. Employing directly allows for more flexibility compared to going through procurement and contractor mobilization. - When specialized or unique skills are required that may not be readily available from contractors. Direct employment allows the

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    Lecture 1

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    Abadit Tadesse
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    Here are a few key points about conditions that might make it advisable for the government to use the force account method of construction: - When the scope of work is small and using contractors would incur high overhead and administrative costs relative to the project size. Directly employing labor may be more cost effective. - When security or confidentiality is essential. Using government employees allows for tighter control over who accesses the site and what information is disclosed. - When the work must be done urgently or within a very tight timeframe. Employing directly allows for more flexibility compared to going through procurement and contractor mobilization. - When specialized or unique skills are required that may not be readily available from contractors. Direct employment allows the

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    Here are a few key points about conditions that might make it advisable for the government to use the force account method of construction: - When the scope of work is small and using contractors would incur high overhead and administrative costs relative to the project size. Directly employing labor may be more cost effective. - When security or confidentiality is essential. Using government employees allows for tighter control over who accesses the site and what information is disclosed. - When the work must be done urgently or within a very tight timeframe. Employing directly allows for more flexibility compared to going through procurement and contractor mobilization. - When specialized or unique skills are required that may not be readily available from contractors. Direct employment allows the

    Copyright:

    © All Rights Reserved
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    Download as pptx, pdf, or txt
    17 views23 pages

    Lecture 1

    Uploaded by

    Abadit Tadesse
    Here are a few key points about conditions that might make it advisable for the government to use the force account method of construction: - When the scope of work is small and using contractors would incur high overhead and administrative costs relative to the project size. Directly employing labor may be more cost effective. - When security or confidentiality is essential. Using government employees allows for tighter control over who accesses the site and what information is disclosed. - When the work must be done urgently or within a very tight timeframe. Employing directly allows for more flexibility compared to going through procurement and contractor mobilization. - When specialized or unique skills are required that may not be readily available from contractors. Direct employment allows the

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    Contracts, Specifications and Quantity

    Surveying
    CE-5121
    Bereket Bezabih
    beackon@gmail.com
    Hydraulic and Water Resource Engineering Department
    2021
    Lecture 1
    THE CONSTRUCTION INDUSTRY
    The Construction Industry
    • It is the highest employer after agriculture in the
    national economy
    • It provides large capital wealth in the form of
    buildings, highways, railways, dams, utilities etc
    • It is multi disciplinary as it involves problems of
    economics and management not to mention
    engineering and technology
    • Each product of the industry is unique in character
    and is produced on its place of use
    The Construction Industry
    • Construction Works
    – Public Works
    • Owned by governments at any level
    – Private Works
    • Owned by individuals, company or corporations
    – Architectural Construction
    • Building construction with exception of industrial buildings
    – Engineering Construction
    • All other construction work (highway, bridge, water supply, dams,
    sewers, railroads, irrigation canals etc)
    The Construction Industry
    • Financing Construction Works
    – Private works can be financed through
    • capital Expenditure
    • Loans
    • Floatation of Shares
    • Corporate Bonds
    – Public Works can be financed through
    • Annual operation Budgets derived from tax
    • Government Bonds
    • Domestic and International Borrowing(Bilateral or Multilateral
    sources)
    The Construction Industry
    • Professional Relationship in Engineering
    • The standard Three Party System
    – Irrespective of the construction type construction works
    involve the following three parties
    • The Owner
    • The Engineer/Architect
    • The contractor
    – The actual working relationship depends on the nature of
    the construction method /Contract
    – A typical working relation ship looks like ….
    – The general duties and responsibilities of each party is
    defined in the contract agreement for the works
    The Construction Industry
    Owner

    Engineer/Architect Contractor

    Subcontractors

    Suppliers

    Fabricators
    The Construction Industry
    • Methods of construction
    – Construction by General Contract
    • Employing a contractor
    – Construction by Force account
    • Day labor method
    – Construction by Separate contract
    • Employ specialty contractors for various part of the work directly
    by the owner
    • How can we select the appropriate method of
    Construction?
    The Construction Industry
    • Methods of construction
    • Variations of General Contract
    – Traditional Approach (D-B-B):
    The most common delivery system is called “the
    traditional or standard approach” or “design-bid-build”, in
    which the employer assigns the design and construction
    phases to two different firms (consultant/designer and
    contract
    Appointing Appointing Main
    Consultant Contractor

    Designing Constructing
    Methods of construction
    • For many years, DBB has been the most common
    method of project delivery for public projects, and
    for many private projects as well.
    • Design Bid-Build is effective on projects
    • where the owner needs both professional design
    services and construction services
    • where the designer does not require detailed
    knowledge of the means and methods of construction.
    • DBB provides the owner with a high degree of
    control. That’s why it is the preferred project delivery
    system for owners who:
    Methods of construction
    – The owner defines project goals and objectives, secures
    the financing, and specifies the standards and contract
    terms.
    – The owner may perform planning, conceptual design and
    full design, or may engage an outside design professional
    (designer) for some or all of these tasks.
    – During this planning and preliminary stage, owner and
    designer work as a team to obtain required permits and
    conduct necessary site investigations.
    – The designer prepares the construction bid documents to
    reflect the owner’s project goals and objectives, the
    project’s site conditions, and sound engineering practices.
    Methods of construction
    • Prospective contractors prepare their bids from these
    complete and specific bid documents.
    • The bidders submit their proposals to the owner,
    who determines the most responsive (typically the
    lowest) bid meeting project requirements.
    • In certain circumstances, owner may be justified in
    selecting a contractor outright and negotiating
    contract terms directly.
    Methods of construction
    • Advantages of DBB
    – Applicable to a wide range of projects.
    – Well established and easily understood.
    – Clearly defined roles for all parties.
    – Provides the lowest initial price that competitive bidders
    can offer.
    – Extensive litigation has resulted in well established legal
    precedents.
    – Insurance and bonding are well defined.
    Methods of construction
    • Disadvantages of DBB
    – Least-cost approach requires higher level of inspection.
    – Initial low bid might not result in ultimate lowest cost or
    final best value.
    – Designers may have limited knowledge of the true cost
    and scheduling implication of design decisions.
    Methods of construction
    • Design Build Approach
    – Design Build Approach is a project delivery involving a
    single contract between the project employer and a
    design-build contractor covering both design and
    construction of the project.
    Appointing design &
    construction
    contractor

    Tendering Designing Constructing


    Methods of construction
    • The owner contracts with a single entity to provide
    the design and to construct the project according to
    that design.
    • The contract might be negotiated with a single
    design-builder or result from competitive proposals.
    • The selection can be based on low price or on a set
    of value criteria (experience, staff, bonding capacity,
    etc.).
    Methods of construction
    • Design-build provides the owner with a single point
    of contact for project responsibilities, eliminating the
    need to assist in resolving designer-contractor
    disputes.
    • With the contractor playing a major role in design,
    costs are typically defined and maintained to a
    greater degree, and the coordination of fast-track
    management to achieve early completion is greatly
    simplified.
    • The design-builder makes many decisions that owner
    would make under DBB, due to delegation of greatly
    increased authority.
    Methods of construction
    • For many owners, delegation of responsibilities leads
    to satisfactory projects. However, if the parties are
    inexperienced and do not cooperate, the transfer of
    control and risk can be disappointing.
    • The owner may need to restructure his/her internal
    procedures to accommodate design-build approach.
    • Compared to DBB, this involves a significantly
    different set of requirements and expectations for
    process, timelines and communications.
    • A clear understanding and documentation of design-
    build processes enhances the quality of design-build
    projects
    Methods of construction
    • Advantages of design and build Approach
    – Innovation and quality improvements through
    • Alternative design and construction methods suited to the
    contractors capabilities
    • Flexible in the selection of design, materials and construction
    methods
    • Early schedule and cost certainty

    • Disadvantages of Design build approach


    • Reduced opportunities for smaller, local construction firms.
    • Fewer competitors and increased risk may result in higher initial
    costs.
    • Elimination of traditional checks and balances. Quality may be
    subordinated by cost or schedule considerations.
    • Less Engineer control over final design.
    • Higher procurement costs.
    Methods of construction
    • Turn Key Projects
    – Turnkey adds to the design-builder’s responsibilities the
    operation and/or maintenance of the completed project.
    – Turnkey delivery has the potential for bringing a new
    project on line more quickly.
    – Three forms of turnkey project delivery:
    – Design-build-operate-transfer
    – Design-build-operate-maintain
    – Design-build-own-operate-transfer
    Methods of Construction
    • Variations on turnkey add financing as a key
    component. While financing arrangements are
    unique for each project, developer financed projects
    generally resemble one of the turnkey delivery
    methods:
    • FDBT (Finance, design, build, transfer)
    • FDBOT (Finance, design, build, operate, transfer)
    • FDBOOT (Finance, design, build ,own, operate, transfer)
    • In each case, the transfer of the project occurs only
    after the developer’s interests and financial
    obligations have been satisfied.
    Construction Cost
    • The cost of Construction Works
    – The over all cost of construction can be grouped in to the
    following categories
    • Direct cost
    – Construction material
    – Direct wages and Salaries
    – Small expendable tools
    • Overhead Cost
    – Plant Charges and Equipment Rentals
    – Overhead salaries
    – Interest on loans and Other financing Costs
    – Taxes, Licenses and Other Assessments
    – Other indirect undistributed costs
    • Contractors net Profit
    Testing times…..
    1. Explain some of the conditions which might make it
    advisable for the government to adopt the force account
    method for the construction of a large dam during economic
    depression in lieu of accomplishing the work by contract.
    2. Explain why it is usually to the best interest of the owner to
    adopt the general-contract method of construction in lieu of
    any other method.
    3. Describe the turnkey methods, turnkey variations, and
    construction management method, highlighting on
    advantage and disadvantage of each one.

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