Construction project management is not a simple job — a construction project manager has to be knowledgeable in finance, mediation, law, and other disciplines.
A construction management project starts with a project owner sharing project information to contractors and subcontractors in order to solicit bids. Contractors and subcontractors give project owners their cost estimates for the project to be completed. This may be open (inviting all contractors) or closed (inviting only a select number of contractors).
Once the project owner receives all the bids, a contractor is then selected based on the lowest bid, best qualifications, or of best value to the company. After that, payment contracts can then be agreed upon and could be lump sum (the most common contract), cost-plus-fee, guaranteed maximum price, or unit price.
The bidding process remains the same with different types of construction project. The business models, though, are of two forms — it’s either design, bid, build where the project owner chooses a contractor after the design phase or design-build where both design and construction phases are done by one contractor.
The Process
1. Initiation
At the start of any project, a business case must be created and evaluated to ascertain the feasibility of the project. Stakeholders then perform feasibility testing accordingly. Once feasibility is determined and all stakeholders and parties agree to advance the project, a project charter or project initiation document (PID) is then created, which includes the business case and the business needs.
2. Planning
Following initiation, the project team creates a roadmap — the project management plan (PMP), a formal document that outlines the project’s execution and control. The PMP also archives baselines for scope, cost, and schedule. Aside from the PMP, the planning phase also includes the creation of the following documents:
- Scope statement and documentation, which establishes the business need, benefits, objectives, deliverables, and key milestones.
- Work breakdown structure, which visually represents the scope breakdown into manageable chunks.
- Communication plan, which defines communication roles, tools and methods in achieving communication goals and objectives. As there are different teams with different communication styles involved, the communication plan outlines a basic framework to put everyone on the same and avoid disagreements or conflicts.
- Risk management plan, which identifies possible risks like nonviable time and cost estimates, budget cuts, regulation changes, etc.
3. Execution
All work begins in this phase. After the kickoff, the project team assigns task and activities to befit stakeholders — allocate resources, execute plans, structure tracking systems, update the project schedule, and refine the project plan.
4. Performance and Monitoring
As the execution phase starts, so does the monitoring phase. As the project advances, building progress and performance are measured to see to it that everything is going according to the project management plan.
5. Closure
The last phase is project completion. A post-mortem meeting is usually carried out to assess what went well and what didn’t. The team then generates a punch list of unfinished tasks, calculates the final budget, and creates a final project report.