CONTRACTS AND SPECIFICATIONS

What does Construction Project Management (CPM) mean?

Construction project management could be defined

as the direction, regulation, and supervision of a project
from early development to completion.
Two types of bids:
 Open bid: Open bids are inextricably connected to
public projects. It’s an auction where any contractor is
welcome to make his offer. An open bid is normally
openly promoted.
 Closed bid: Private projects are based on closed bids.
The project owner sends a bid invitation to a specific
number of contractors.
 Three Methods:
1. Low-bid selection: In that case, the main focus of interest
is the price. The construction management companies
present the lowest bids they are open to complete the project
for. The project owner selects the lowest offer and proceeds
with it.
2. Best value selection: This process puts weight both on
qualifications and price. The owner is choosing the most
appealing bid both in terms of quality and money.
3. Qualifications-based selection: The present method is
adopted when qualifications are used as the only criterion for
the selection of the construction management company. A
request for qualifications (RFQ) is helping the owner in order
to acquire further information regarding the experience and
the project organization competences of the contractor.
Four Contract Types:
 Lump sum: The most popular kind of agreement. The
owner and the contractor set a fixed price for the
whole project. The price remains the same even if the
total cost of the project is proven to be higher lower
than the agreed amount.
 Unitprice: When there are objective difficulties in
deciding the final price in advance, this method is
preferred. The project owner offers materials with a
particular unit price in order to reduce spending.
 Cost plus fee: A cost plus fee contract is the best
contract agreement for contractors. On top of the
project’s total cost and the agreed fixed fee for the
contractor, any other unpredictable expenses have to
be covered by the owner after in the end.
 Guaranteed maximum price: The last type of
contract doesn’t differ much than the previous one.
The key difference is the maximum set price which
can’t be surpassed in this case.
What are Construction Specifications?

 Construction specifications, also called specs, are

the details for the work that needs to be completed in a
construction project. These details include
information such as materials, the scope of work,
installation process, and quality of work.
Three Types:
 Prescriptive Specifications
focus on the details for the types of materials
used and the installation of said materials.This type
of spec usually involves three key components:
General provisions: requirements surrounding codes and
standards
Required products: the type of products required based on
performance and structural stipulations
Execution procedures: how to do the install and measure its
effectiveness
 Performance Specifications
discuss the operational requirements of a project.
 Proprietary Specifications
used when you need to use a single type of product
for any kind of installation.
Why Are Specs Important?
If you’ve been around the construction industry for more
than a minute, you know the more details, the better.
The clearer a description is, the more likely it will be
executed correctly. Specifications can be considered a lot
of like data. Without access to the right and an
abundance of data, projects can easily fail. As
construction projects become more complex and
budgets become scrutinized, access to ample data is
critical to making the right decisions when building.
Most importantly, if specifications are done correctly,
they reduce risk. In construction, controlling risk is
essential to managing end-to-end project lifecycle.