Construction Management Framework [3 Hours]

1.1 Construction Landmarks

Construction is a process of building or assembling of infrastructure. The construction project is a construct of infrastructure within the budget, time and quality. Essential planning, proper design, and well-planned execution are required for the construction projects. There are various types of construction like building construction, industrial construction, infrastructure construction, and heavy construction.

1.1.1 Components of Construction Management

Construction management is a multifaceted task composed of different components. The necessity of construction project management:

• To check the wastage of labor and materials
• To reduce the construction cost
• To complete the work in the shortest possible time
• To improve the quality of works
• Proper coordination between all stakeholders

1.1.2 World’s Famous Construction Landmarks

(Source: International Journals)

1.1.3 Construction Landmarks of Nepal

(Source: Technical Journals)

1.2 Scope of Construction Management 2075207420732070

1.2.1 Role of Construction Industry in National Economy

• In Nepal, more than 10 percent of the GDP is contributed by the construction sector and is one of the largest employers.
• It is estimated that this sector is creating employment opportunities for more than one million people in the country.
• Nepalese Contractors are now saving a huge amount of foreign currency from its flight to abroad by foreign contractors. So it is contributing to export industries to the national economy.
• Therefore any enhancement made to this sector will have a positive impact on the national economy.
• In developing countries, about 60 percent of the national budget is allocated on development works and a significant portion of the development budget is allocated to the construction sector in Nepal.

Scope of construction management can be traced into two different areas:

1. International Export Market: Construction managers can work in international projects — exporting construction services, labor, and expertise to foreign markets. The world is seeking good construction managers globally.
2. Infrastructure Domestic Market: Within Nepal, massive infrastructure development (roads, hydropower, buildings, irrigation) requires skilled construction management. About 60% of the national budget goes to development works.

1.3 Construction Project Characteristics 20792071

A project is defined as a temporary endeavor undertaken to create a new product or service to achieve specified objectives within the assigned resources. A project is a mission. Projects are usually a part of an overall, strategic program. A program at the macro level comprises one or more projects.

Some examples of construction projects include:

• Constructing a building or facility.
• Developing a new product or service.
• Designing a new transportation system.

In general, the term ‘construction project’ refers to a high-value, time-bound, special construction mission with pre-determined performance objectives. Construction projects employ huge resources of men, materials, and machines. The construction project mission is accomplished within complex project environments by putting together human and non-human resources to form a temporary organization (like a task force of the army), headed by a project manager.

1.3.1 Characteristics of a Construction Project 2071

1. Objectives: A project’s output is measurable. Without a clear objective, the project is unthinkable. Its objectives are predetermined.
2. Life Span: It has a definite life span. It has a definite beginning and an identifiable end. All projects have a definite beginning and end. Projects cannot continue endlessly. A project is a one-time-only set of activities. Its life span can be short or long depending on its nature and scope. It has a life cycle consisting of formulation, planning, implementation and termination phases.
3. Constraints: All projects have constraints. A project operates within the constraints of time, cost and quality performance. It has a time schedule for various activities and a completion date as a deadline. It has clearly laid down quality specifications. The scope and boundaries of a project are clearly delineated. Project schedule sets deadlines.
4. Unique: Each project is different. No two projects are exactly similar. Clearly, no two projects are exactly similar. Every project is unique in some elements. It consists of customized non-repetitive activities. It has a specific geographical location. It involves a complex set of activities.
5. Team Work: Projects work through teamwork. A project consists of a multi-functional team. Team members are temporarily assigned from other functional departments and or resources from various disciplines with varied expertise together to form a temporary organization. The project manager is the leader of the team. He/She builds and manages the team.
6. Risk and Uncertainty: Projects involve risk and uncertainty at different stages of the life cycle. Project risks can be related to time, costs, technology, scope and performance.
7. Resource Integration: Projects consume and coordinate resources. A project integrates physical, financial, human information. It maintains appropriate interrelationships with them. Resource use is prioritized in a disciplined way for optimization.
8. Planning and Control: Projects work to a plan. A project requires effective and efficient planning and control systems. Standards are set for project activities through planning. They serve as yardsticks for measuring project performance. Actual performance is compared with standards to find out deviations. Corrective actions are taken to control deviations.
9. Contracting and Sub-contracting: Most projects are contract-based. The project work is characterized by a high level of contracting and subcontracting. Contracts can be of various types, such as lump-sum contract, unit price contract, negotiated cost plus fixed fee contract and turnkey contract. Proper contract planning and management is the key to effective project management.
10. Beneficiaries: All projects have beneficiaries. Beneficiaries are the ultimate users of the project outputs. They are the client of the project. A project has a specific group of beneficiaries. It should be focused on fulfilling or exceeding their requirements. Projects should clearly identify the needs of their beneficiaries.

1.3.5 Construction Project Environment 2079

Yes, management failures are a major cause of delay and cost overrun in construction projects. Poor planning, inadequate scheduling, lack of coordination among stakeholders, unclear scope definition, and weak monitoring and evaluation systems are primary reasons why projects fail to meet their time and budget targets. However, apart from management failures, the construction project environment also plays a significant role.

Construction projects operate within complex and dynamic environments. The major environmental factors affecting construction projects are:

1. Physical/Natural Environment: Topography, soil condition, weather and climate, seismic zone, natural disasters (floods, landslides, earthquakes). Nepal’s difficult terrain and monsoon climate frequently cause delays.
2. Economic Environment: Market conditions, inflation, availability of construction materials, exchange rate fluctuations, economic policies, budget allocation and fund flow from government.
3. Political/Legal Environment: Government policies, political instability, frequent changes in government, labor laws, environmental regulations, land acquisition issues, local body interference.
4. Social/Cultural Environment: Community opposition, resettlement issues, religious/cultural sensitivities, local festivals, labor availability and migration patterns.
5. Technological Environment: Availability of modern equipment and technology, skill level of workforce, adoption of new construction methods, IT tools for project management.
6. Organizational/Institutional Environment: Bureaucratic delays, weak institutional capacity, corruption, slow decision-making, lack of qualified project managers, poor contract management.

In Nepal, the political environment (frequent government changes, policy inconsistency), geographical environment (hilly terrain, landslide-prone areas), and institutional weaknesses (bureaucratic delays, slow fund release) are the most common causes of project delays and cost overruns, compounding the effect of management failures.

1.4 Construction Project Life Cycle Phases 20802074207320722070

Each construction project has a pre-determined duration with a definite beginning and an identifiable end. Each project is divided into several phases. A project starting point is a time when the need is conceived by the client and its end marks the time when the mission is accomplished. The time between the start and completion of a project represents the project life cycle. Collectively, a project life cycle comprises of the project phases, from the beginning to the end of the project.

The project life cycle of a construction project is divided into several phases for management control. These phases in a typical construction project are:

1.4.1 Project Initiation Phase

In this phase, project formulation is carried out. Formulation of the project scope and their implementation strategy is done. The output of this phase marks the client go-ahead or no-go decision for investment.

1.4.2 Planning Phase

The objective of this phase is to create a manageable planning. It includes project scope, objectives, preliminary plans, and organizational structure for execution of the project.

1.4.3 Executing Phase

This phase is concerned with coordinating and managing people and other resources, to carry out the plan. The executing phase is also known as the implementing phase. This phase of the lifecycle involves building physical deliverables and is presented to customers. It is the longest phase and consumes a lot of energy, effort, and resources. In this phase, the activities like allocation of the tasks to team members, procurement activities, contract administration, MIS set up, are carried out.

1.4.4 Controlling Phase

Project plan indicates the path to achieve objectives. During the implementation phase, the project control aims to track the progress of work as per the planned schedule and take corrective actions including re-planning, when necessary, to achieve the project objectives. Project control follows a system concept. Monitoring and Evaluation are used collectively for the controlling of project activities.

1.4.5 Closing Phase

It finalizes the acceptance of the project and brings it to an orderly end. After completion of a project by the contractor, it is handed over to the client. The team also prepares a project report which includes the scope and schedule of work executed, the addresses of the suppliers, equipment maintenance manual, the problems encountered during the project, and defects noticed at the time of handover.

1.4.6 Most Problematic Phase in Nepal’s Mega Projects 2080

In the context of Nepal, the Project Initiation Phase and the Executing Phase are the most problematic in mega projects:

• Initiation Phase: Mega projects in Nepal suffer from inadequate feasibility studies, unrealistic cost estimates, politically motivated project selection rather than need-based, poor Environmental Impact Assessment (EIA), and lack of proper stakeholder consultation. Examples include Melamchi Water Supply Project, Kathmandu–Terai Fast Track, and various hydropower projects where initial planning was flawed.
• Executing Phase: This is the most problematic phase in Nepal. Major issues include:
  • Land acquisition delays and compensation disputes
  • Frequent contractor mobilization/demobilization due to political instability
  • Slow fund release from the government (budget cycle mismatch)
  • Labor shortages due to foreign migration
  • Difficult terrain and monsoon-related work stoppages
  • Weak contract management and variation order disputes
  • Local community resistance and bandhs/strikes

As a result, most mega projects in Nepal (Melamchi, Upper Tamakoshi, Gautam Buddha International Airport, Pokhara International Airport, Fast Track) have experienced significant time and cost overruns, primarily during the executing phase.

1.4.6 Summary of Detailed Activities in Each Phase

1.5 Construction Project Management 2079207720732072

Definition: Project management implies the application of knowledge, skills, tools, and techniques to perform project activities in order to meet and exceed stakeholder needs and expectations within time, cost and quality constraints.

Construction management aims at achieving the objectives efficiently and effectively by optimizing the human and non-human resources.

The client is one who draws/builds the house in the brain (mind), the consultant is one who draws/builds the house in paper and the contractor, the ultimate builder who builds the house at the site in real.

The project manager, to achieve his mission, efficiently and effectively, to client satisfaction, does so by:

• Balancing: Time and progress, cost and cash flow, performance and organization behavior.
• With: Assigned organization resources.
• By: Planning, scheduling, directing, monitoring and controlling resources.
• Within: Quality, time, cost, and environmental constraints.

1.5.1a Why Construction Team Needs Knowledge of Construction Management 2077

Construction projects utilize huge resources — the 5Ms: Man, Money, Materials, Machine, and Methodology (Minute/Time). Without proper management knowledge, these resources are wasted, leading to delays, cost overruns, quality issues, and disputes. The construction team needs CM knowledge because:

1. Resource Optimization: CM provides modern tools and techniques (CPM, PERT, Bar Charts, Time-Cost Trade-off) to optimize the use of men, materials, machines, and money for maximum productivity.
2. Time Management: Without proper scheduling and planning knowledge, construction activities cannot be sequenced efficiently, leading to idle resources and project delays.
3. Cost Control: CM knowledge enables the team to prepare realistic estimates, control variation orders, manage cash flow, and prevent cost overruns through systematic monitoring.
4. Quality Assurance: Knowledge of quality management systems ensures the constructed facility meets specified standards and client expectations, reducing rework and defects.
5. Risk Mitigation: CM helps identify, assess, and mitigate project risks related to time, cost, technology, and scope, reducing uncertainties.
6. Coordination and Communication: Multi-discipline projects involve multiple stakeholders (client, consultant, contractor, suppliers). CM provides communication frameworks and contract management knowledge for smooth coordination.
7. Contract Administration: Understanding contract types (lump-sum, unit rate, cost-plus, BOT), conditions (FIDIC, NCB), and dispute resolution mechanisms is essential for project success.

1.5.1b Functions of Construction Project Management 20792073

The five key functions of construction project management are:

1. Planning: Determining what to do, when to do, and how to do. In Nepal’s context, planning is crucial for infrastructure development (roads, hydropower, irrigation) given limited budget and difficult terrain. It includes feasibility study, scope definition, resource planning, and scheduling (CPM/PERT). Addressing delay: Proper planning with realistic schedules prevents unrealistic deadlines and identifies critical activities.
2. Organizing: Establishing structural relationships among functions, people, and resources. In Nepal, organizing construction teams with clear hierarchies (Project Manager → Site Engineers → Supervisors → Workers) and delineating responsibilities is essential given the multi-stakeholder nature of government projects. Addressing quality: Clear responsibility allocation ensures accountability for quality at every level.
3. Staffing: Selection of the right person for different jobs. Nepal faces challenges of skilled labor migration to Gulf countries and lack of trained construction managers. Proper staffing with qualified engineers, skilled workers, and experienced site supervisors directly impacts project quality and timeline. Addressing poor quality: Competent staff with proper training ensures quality standards are met.
4. Directing: Motivation, guidance, supervision, and leading employees to achieve project goals. Given Nepal’s dispersed project locations (remote hills, Terai), effective directing through communication and motivation is critical. Addressing delay: Active leadership keeps teams motivated and work progressing despite challenges.
5. Controlling: Monitoring actual progress versus planned program, identifying deficiencies, and taking remedial measures. In Nepal, where political instability and natural disasters frequently disrupt projects, controlling through regular monitoring, Earned Value Analysis, and corrective action is essential. Addressing budget overrun: Continuous cost monitoring against budget with variance analysis prevents uncontrolled spending.

1.5.1c How CM Course Addresses Project Problems 2079

The Construction Management course equips engineers with scientific management tools and techniques that directly address the three major problems in construction projects:

1.5.1 Construction Management Participants / Stakeholders

Project stakeholders/participants are the individuals and organizations who are actively involved in project execution or successful completion. Key stakeholders on a typical project include:

• Business Promoters / Owners
• Architect-Engineering Associates
• Management Consultants
• Construction material, Equipment Suppliers
• Contractors
• Project Manager

1.6 Relation between Client, Consultant, and Contractor 208120792078207520742072207120702069

The client, the consultant, and the contractor are three major parties involved in construction activities. The client is the owner and ultimate user of the constructed facilities. The consultant, in general, is an engineer who is involved in planning, designing and cost estimation of the infrastructure facilities in close coordination with the client. The contractor is responsible for the quality control of the work and who builds the facilities as per the design and in close supervision and monitoring from client and consultant both.

In a simple way to understand, the client is one who draws/builds the house in the brain (mind), the consultant is one who draws/builds the house in paper and the contractor, the ultimate builder who builds the house at the site in real.

The major relation between these three parties is governed by the type of the contract, its conditions and the nature of the work. The client is an investor who invests the money for the project. The consultant plays the bridge between the payment to the contractor and the owner. Basically, according to the nature of the role, the relation between them can be divided into either two-party system or three-party system.

1.6.1 Three-Party System (FIDIC) 2079 2078 2075 2074 2072 2071 2069

In the three-party system (FIDIC), the Employer has separate agreements with the Consultant (Consultancy Agreement) and the Contractor (Construction Contract). The Engineer/Consultant acts as the intermediary:

• Employer ↔ Contractor: Construction Contract
• Employer ↔ Engineer: Consultancy Agreement
• Engineer → Contractor: Supervision, Notice, Instruction, Determination, Approval
• Contractor → Engineer: Report, Notice, Application

1.6.2 Two-Party System (NCB, Japanese System, etc.)

In the two-party system, the Employer has a consultancy agreement with the Consultant and a construction contract with the Contractor. The Consultant provides supervision, instruction, determination and approval directly to the Contractor.

1.6.3 Roles and Responsibilities of the Employer (Client) 2079 2074

The Employer of the construction project may be an individual, partnership firm, a limited company, occupier, developer, implementing agency, governmental department, ministry, NGOs, INGOs, an individual, etc. The Employer possesses the following roles and responsibilities in construction projects:

• Invites tenders for the project through a tender process.
• Approves the performance security.
• Ensures insurance is in accordance with the law.
• The Employer makes the advance payment (if applicable).
• Authorizes the Contractor to move on to the site.
• Makes payments (as per running bills) of certified amounts.
• May authorize work to be done if contractor is in default.
• The Employer can terminate the contract in case of contractor failing to perform or in certain other circumstances defined in, and subject to, the law governing the contract.
• Should settle the disputes promptly in general.

1.6.4 Roles and Responsibilities of the Contractor 2074

The contractor is one who carries out construction works:

• Executes the works taking full responsibility for timely completion and safety of the works.
• He/She will set out the work, construct the works, carry out tests, care of works, rectify the defects, manage workmen, work and materials, equipment and liabilities, take responsibility for the health of worker, maintain specification, complete tests on work and hand over the project.
• After handing over, the Contractor is also responsible for maintenance of defects during the defects liability period.

1.6.5 Roles and Responsibilities of the Consultant / Engineer 2081 2070

An individual engineer/architect, an independent professional organization, practicing consulting firm, a government entity:

• Design, research, and investigation for design
• Prepare cost estimates at different stages
• Help the client in preparation of Bid documents
• Help the client in contractor selection procedures
• Quality, cost and time control
• Supervise the works of the contractor
• Reporting to the client
• Works as a client’s representative, agent
• Acts as arbitrator
• Approval for the bills and guide the client for payment

Important Things to Consider