Construction Industry Structure

The construction industry is structured in a manner wherein all the main players are
interconnected to each other.
ELEMENTS of CONSTRUCTION INDUSTRY

Professionals in the Construction Industry (as of 2009)

The construction industry in the Philippines has generated millions of jobs for domestic and
overseas workers and professionals. The five (5) sectors of construction service industry: Site Preparation,
General Engineering Construction, Building Installations, Other Building Completion Activities, and
Renting of Construction or Demolition Equipment with Operators, have mostly provided source of
livelihood to some engineers and other professionals.

Construction Contracts
According to the Department of Public Works and Highways (DPWH), in the manner prescribed by
Republic Act 9184, otherwise known as the Government Procurement Reform Act, and its
implementing rules and regulations, for each construction contract under normal or ordinary conditions,
the following plans shall be prepared in accordance with guidelines and standards adopted by the
Procuring Entity / LGU concerned, incorporating at least the following:
i. Site development plan;
ii. Plans and profile sheet;
iii. Typical sections and details;
iv. Drainage details where applicable;
v. Structural plans at appropriate scales indicating all details necessary in order that the complete structure
can be set out and constructed; and
vi. Other details which may be required by the head of the agency / LCE.

In addition, based from the Manual of Procedures for the Procurement of Infrastructure Projects made by
DPWH, the bidding documents should clearly state the type of contract to be entered into and contain the
proposed contract provisions appropriate therefore. The most common types of contracts provide for
payments on the basis of a lump sum, unit price, or combinations thereof.
A typical construction contract between the owner and the contractor include the following items:
i. General Conditions of project
ii. Duration of project
iii. Amount of project
iv. Variation orders (e.g. changes from original plans)
v. Liquidated damages (e.g. delays)
vi. Scope of Work

The size and scope of individual contracts will depend on the magnitude, nature, and location of the
project, for example:
i. For projects requiring a variety of goods and works, separate contracts may be awarded for the supply
and/or installation of different items of equipment and plant (plant refers to installed equipment, as in a
production facility) and for the works.

ii. For a project requiring similar but separate items of equipment or works, bids may be invited under
alternative contract options that would attract the interest of both small and large firms, which could be
allowed, at their option, to bid for individual contracts (slices) or for a group of similar contracts
(package). All bids and combinations of bids should be received by the same deadline and opened and
evaluated simultaneously so as to determine the bid or combination of bids offering the lowest calculated
cost to the procuring entity / LGU.

iii. In certain cases, the procuring entity / LGU may require a turnkey contract under which the design and
engineering, the supply and installation of equipment, and the construction of a complete facility or works
are provided under one (1) contract. Alternatively, the procuring entity / LGU may remain responsible for
the design and engineering, and invite bids for a single responsibility contract for the supply and
installation of all goods and works required for the project component. Also acceptable where appropriate
are contracts such as, but not limited to:
design and build;
 design, build and operate;
design, build and lease; and
Management contract.

Currently, the DPWH is finalizing the mechanism for long-term maintenance contracts by the private
sector (for a period of 5-10 years) in road and bridge construction. The contracts will now be
performance-based to improve the quality of roads and to lower program costs. Basic to the concept of
performance-based contracting is to adopt contracting specifications and procedures permitting the
contractor to devise the most efficient and effective way to perform the work. This offers complete
accountability on the part of the contractor (i.e. transfers performance risk to the contractor). Expected
benefits of this way of contracting are as follows:
i. Encourages and promotes contractors to be innovative and find cost effective ways of
delivering services
ii. Results in better prices and performance
iii. Maximizes competition and innovation
iv. Lowers ongoing expenses
v. Achieves cost savings
vi. Expects contractors to control costs
vii. Creates better value and enhanced performance
viii. Gives the contractor more flexibility to achieve the desired results
ix. Shifts risk to contractors so they are responsible for achieving the objectives
x. Provides incentives to improve contractor performance and ties contractor compensation to
achievement
xi. Provides financial incentives for efficient use of resources
xii. Rewards good performance

In the Philippines, only contractors accredited by the Philippine Contractors Accreditation Board (PCAB)
should enter in a construction contract with its clients. For 2010-2011, PCAB has issued a total of 3,325
contractors licenses. Out of the total, 97.3% are for renewal while 2.7% are new issuances.

Accredited Construction Companies

Client types
Private
Private clients are sole traders or domestic clients who would like to have a house building
altered, extended or maintained. They enter into private agreements with a builder to undertake
the work. The private client may have an architect who has produced the drawings if planning or
building regulations are required.
Commercial
A commercial client is a factory or business that needs to undertake building works in order to
produce a product or process
The Government
The Government can issue work at different levels:
Level 1: Local councils - Have the duty of Constructing and maintaining services.
Level 2: National Council - May instruct major capital works, such as
new public buildings or significant infrastructure changes.

Bank ansd Financial Insitution

A financial institution is an establishment that conducts financial transactions such as

investments, loans and deposits. Almost everyone deals with financial institutions on a
regular basis. Everything from depositing money to taking out loans and exchanging
currencies must be done through financial institutions. Here is an overview of some of
the major categories of financial institutions and their roles in the financial system.

Commercial Banks
Commercial banks accept deposits and provide security and convenience to their
customers. Part of the original purpose of banks was to offer customers safe keeping for
their money. By keeping physical cash at home or in a wallet, there are risks of loss due
to theft and accidents, not to mention the loss of possible income from interest. With
banks, consumers no longer need to keep large amounts of currency on hand; transactions
can be handled with checks, debit cards or credit cards, instead.

Investment Banks

may be called "banks," their operations are far different than deposit-gathering
commercial banks. An investment bank is a financial intermediary that performs a variety
of services for businesses and some governments. These services include underwriting
debt and equity offerings, acting as an intermediary between an issuer of securities and
the investing public, making markets, facilitating mergers and other corporate
reorganizations, and acting as a broker for institutional clients. They may also provide
research and financial advisory services to companies. As a general rule, investment
banks focus on initial public offerings (IPOs) and large public and private share offerings

Insurance Companies
Insurance companies pool risk by collecting premiums from a large group of people who
want to protect themselves and/or their loved ones against a particular loss, such as a fire,
car accident, illness, lawsuit, disability or death. Insurance helps individuals and
companies manage risk and preserve wealth. By insuring a large number of people,
insurance companies can operate profitably and at the same time pay for claims that may
arise. Insurance companies use statistical analysis to project what their actual losses will
be within a given class. They know that not all insured individuals will suffer losses at the
same time or at all.

Brokerages
A brokerage acts as an intermediary between buyers and sellers to facilitate securities
transactions. Brokerage companies are compensated via commission after the transaction
has been successfully completed. For example, when a trade order for a stock is carried
out, an individual often pays a transaction fee for the brokerage company's efforts to
execute the trade.

Investment Companies
An investment company is a corporation or a trust through which individuals invest in
diversified, professionally managed portfolios of securities by pooling their funds with
those of other investors. Rather than purchasing combinations of individual stocks and
 bonds for a portfolio, an investor can purchase securities indirectly through a package
product like a mutual fund.

Equipment Manufacturer

-providers of construcxtion equipment.

Resources

A resource is a source or supply from which benefit is produced. Typically resources

are materials, energy, services, staff, knowledge, or other assets that are
transformed to produce benefit and in the process may be consumed or made
unavailable. Benefits of resource utilization may include increased wealth, meeting
needs or wants, proper functioning of a system, or enhanced well being. From a
human perspective a natural resource is anything obtained from the environment to
satisfy human needs and wants. [1] From a broader biological or ecological
perspective a resource satisfies the needs of a living organism (see biological
resource).[2]

Various Sectors of Construction Industry

The various sectors are: industrial, institutional and commercial, civil engineering and roadwork,
and residential.

Industrial sector

The industrial sector includes the construction of buildings, including facilities and equipment
physically attached to these buildings or not, used mainly for an economic activity involving
exploitation of mineral resources, transformation of raw materials, and production of goods.

Institutional and commercial sector

 The institutional and commercial sector includes the construction of buildings, including facilities
and equipment physically attached to these buildings or not, used mainly for institutional and
commercial purposes, as well as all structures that cannot be included in the residential, industrial,
and civil engineering and roads sectors.

Civil engineering and roads sector

The civil engineering and roads sector includes construction of works of general interest for
public or private use, including facilities, equipment, and buildings physically attached to these works
or not, notably construction of roads, aqueducts, sewers, bridges, dams, electricity lines, and natural-
gas pipelines.

Residential sector

The residential sector includes the construction of buildings, including facilities and equipment
physically attached to these buildings or not, in which more than 85% of the area, excluding parking
spaces, is used for habitation and the number of floors above the ground, excluding all parts of the
basement and seen from all sides of the building or group of buildings, does not exceed six in the case
of new buildings or eight in other cases.

Light residential construction work is done on buildings for which the frame is not composed
mainly of beams and columns made of steel, reinforced concrete, or similar materials.

Heavy residential construction work is done on buildings for which the frame is composed
mainly of beams and columns made of steel, reinforced concrete or similar materials.
Construction Industry Structure

Prepared by:

Group 6

Concepcion, Jerbie G.C.

Domen Jr., Ricardo B.

Paradero, Mark Anthony B.

Nicolas, Arjay M.

Trajano, Bryan A.

Villanueva, Maureen Joyce D.C.

 Prepared to:

Engr. Ruel Casimiro

Table of Contents
I. Introduction
II. Various Construction Industry Sector
III. Elements of Construction Industry
IV. Industry Structure
V. Conclusion
Introduction

From the moment you were born you have needed the built environment for work, rest and play,
to provide shelter from the elements, to protect you and make your life comfortable. The design and
construction of buildings can be a complex operation that involves different professions, contractors,
subcontractors and operatives on site. This unit explores the different personnel working within the
construction industry and their roles and responsibilities, the training required and the qualifications
needed to support their careers.

The construction and built environment sector forms a substantial part of our economy, from
large infrastructure works such as motorways, through to hospitals and housing. It covers a diverse range
of different activities, projects, employment and services. These activities begin with the design element
of projects and continue through the construction phase into refurbishment and maintenance.

Construction is a growing sector within many developing countries. Multi-storey structures

dominate many city skylines. Every one of these structures needed suitably qualified and trained
personnel to construct them.