CONSTRUCTION CONTRACT BASIC DEFINITION AND TUTORIALS

Construction projects are done under a variety of contract arrangements for each of the parties involved. They range from a single contract for a single element of the project to a single contract for the whole project, including the financing, design, construction, and operation of the facility. Typical contract types include lump sum, unit price, cost plus, and construction management.

These contract systems can be used with either the competitive bidding process or with negotiated processes. A contract system becoming more popular with owners is design-build, in which all of the responsibilities can be placed with one party for the owner to deal with.

Each type of contract impacts the roles and responsibilities of each of the parties on a project. It also impacts the management functions to be carried out by the contractor on the project, especially the cost engineering function.

A major development in business relationships in the construction industry is partnering. Partnering is an approach to conducting business that confronts the economic and technological challenges in industry in the 21st century.

This new approach focuses on making long-term commitments with mutual goals for all parties involved to achieve mutual success. It requires changing traditional relationships to a shared culture without regard to normal organizational boundaries.

Participants seek to avoid the adversarial problems typical for many business ventures. Most of all, a relationship must be based upon trust. Although partnering in its pure form relates to a long-term business relationship for multiple projects, many single project partnering relationships have been developed, primarily for public owner projects.

Partnering is an excellent vehicle to attain improved quality on construction projects and to avoid serious conflicts. Partnering is not to be construed as a legal partnership with the associated joint liability. Great care should be taken to make this point clear to all parties involved in a partnering relationship.

Partnering is not a quick fix or panacea to be applied to all relationships. It requires total commitment, proper conditions, and the right chemistry between organizations for it to thrive and prosper.

The relationship is based upon trust, dedication to common goals, and an understanding of each other’s individual expectations and values. The partnering concept is intended to accentuate the strength of each partner and will be unable to overcome fundamental company weaknesses; in fact, weaknesses may be
magnified.

Expected benefits include improved efficiency and cost effectiveness, increased opportunity for innovation, and the continuous improvement of quality products and services. It can be used by either large or small businesses, and it can be used for either large or small projects.

Relationships can develop among all participants in construction: owner-contractor, owner-supplier, contractor-supplier, contractor-contractor. (Contractor refers to either a design firm or a construction company.)

QUALITY INSPECTION ON CIVIL CONSTRUCTION PROJECT BASIC AND TUTORIALS

Prior to the Industrial Revolution, items were produced by an individual craftsman, who was responsible for material procurement, production, inspection, and sales. In case any quality problems arose, the customer would take up issues directly with the producer.

The Industrial Revolution provided the climate for continuous quality improvement. In the late 19th century, Fredrick Taylor’s system of Scientific Management was born. It provided the backup for the early development of quality management through inspection.

At the time when goods were produced individually by craftsmen, they inspected their own work at every stage of production and discarded faulty items. When production increased with the development of technology, scientific management was born out of a need for standardization rather than craftsmanship.

This approach required each job to be broken down into its component tasks. Individual workers were trained to carry out these limited tasks, making craftsmen redundant in many areas of production. The craftsmen’s tasks were divided among many workers.

This also resulted in mass production at lower cost, and the concept of standardization started resulting in interchangeability of similar types of bits and pieces of product assemblies. One result of this was a power shift away from workers and toward management.

With this change in the method of production, inspection of the finished product became the norm rather than inspection at every stage. This resulted in wastage because defective goods were not detected early enough in the production process.

Wastage added costs that were reflected either in the price paid by the consumer or in reduced profits. Due to the competitive nature of the market, there was pressure on manufacturers to reduce the price for consumers, which in turn required cheaper input prices and lower production costs.

In many industries, emphasis was placed on automation to try to reduce the costly mistakes generated by workers. Automation led to greater standardization, with many designs incorporating interchanges of parts. The production of arms for the 1914–1918 war accelerated this process.

An inspection is a specific examination, testing, and formal evaluation exercise and overall appraisal of a process, product, or service to ascertain if it conforms to established requirements. It involves measurements, tests, and gauges applied to certain characteristics in regard to an object or an activity.

The results are usually compared to specified requirements and standards for determining whether the item or activity is in line with the target. Inspections are usually nondestructive. Some of the nondestructive methods of inspection are

• Visual
• Liquid dyed penetrant
• Magnetic particle
• Radiography
• Ultrasonic
• Eddy current
• Acoustic emission
• Thermography

The degree to which inspection can be successful is limited by the established requirements. Inspection accuracy depends on

1. Level of human error
2. Accuracy of the instruments
3. Completeness of the inspection planning

Human errors in inspection are mainly due to

• Technique errors
• Inadvertent errors
• Conscious errors
• Communication errors

Most construction projects specify that all the contracted works are subject to inspection by the owner/consultant/owner’s representative.