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How To Complete a Construction Project on Time (9 Tips) https://lnkd.in/egHPikMT

A construction project doesn't simply commence with the signing of a contract; its inception begins long before that crucial moment. This article will delve into the comprehensive phases that a construction project traverses, starting from the initial decision-making stage and extending all the way through to the warranty period.

Cost Plus Contracts......... In construction projects, it is common for the owner to propose cost-plus contracts, where the owner pays the actual cost of construction plus a fee, which may be a percentage of the costs or a lump sum. It is also possible for these contracts to include a guaranteed maximum price. While cost-plus contracts provide for an open book process and may allow for the most flexibility and control for the owner, they may also pose the risk of cost overruns. This is because, in a cost-plus contract, the contractor has little incentive to keep costs down since the owner is going to pay the costs plus the fee to the contractor regardless. This may result in a lack of cost control and potentially an increment in the construction cost.  In the case of the owner as the contractor, the owner may prefer to use cheaper, low-quality materials and construction methods to save costs, hoping that defects and maintenance issues in the construction work may only arise after completion. This would lead to cutting corners during the construction to maximize savings. However, such actions would likely result in cost overruns in the long run when these defects and maintenance issues surface through the lifetime of the constructed facility, as the owner will ultimately have to pay for remedial works. Most importantly, if the owner stops funding before paying for all cost overruns, the contractor could face the risk of not getting fully paid for the work as well. On the other hand, guaranteed maximum price contracts shift the risk of cost overruns from the owner to the contractor. In this type of contract, the contractor is required to bear the costs of any overruns of the guaranteed maximum price and does not get any additional payments for cost increases. However, these contracts also tend to include higher costs and fees to the contractor for providing the guarantee. This is an interesting area to explore and further investigate the different impacts on project performance between these types of contracts.

31 Construction Documents (Templates Included): Construction projects come in all shapes and sizes, but all must be monitored closely. This is why a project has many construction documents. Building a structure is a complicated job and every aspect of it requires construction drawings to plan... Read More The post 31 Construction Documents (Templates Included) appeared first on ProjectManager. @Poseidon-US #ProjectManagement #Innovation

Cost overruns in construction projects refer to situations where the actual costs exceed the budgeted amounts. This phenomenon has become quite common in the industry, with studies indicating that only 31% of projects stay within 10% of their original budget over recent years 1 . Common Causes of Cost Overruns: 1- Inaccurate Initial Estimates: Many cost overruns stem from poor planning and inaccurate cost estimates made during the project scoping phase. If the initial budget does not accurately reflect the project's requirements, overruns are almost inevitable . 2- Scope Changes: Changes in project requirements, often referred to as scope creep, can significantly increase costs. For instance, if a client decides to expand the project size by 20%, the costs are likely to increase proportionately . 3- Contractor Selection: Often, projects are awarded to the lowest bidder without adequate vetting. This can lead to issues later on, as contractors may cut corners to maintain profitability, resulting in additional costs for the project owner. . 4- Material and Labor Costs: Fluctuations in the prices of materials and labor shortages can also contribute to overruns. For example, rising material costs have been a persistent issue in recent years. 5- Poor Communication: Miscommunication among project stakeholders can lead to misunderstandings about project requirements and progress, further exacerbating budget issues. Strategies to Mitigate Cost Overruns: For effectively managing and reducing the risk of cost overruns, several strategies can be employed: 1- Thorough Planning: Investing time in detailed project planning and ensuring that all stakeholders agree on the project scope can help prevent overruns 2 2- Regular Monitoring: Implementing a robust system for tracking costs and progress can help identify potential overruns early, allowing for timely interventions. 3- Contingency Budgets: Including a contingency budget (often recommended at around 20%) can provide a buffer against unexpected costs. 4- Effective Communication: Establishing clear lines of communication among all parties involved in the project can help ensure that everyone is on the same page and reduce the likelihood of miscommunication-related issues. By understanding the common causes of cost overruns and implementing effective management strategies, construction projects can be kept closer to their original budgets, ultimately leading to more successful outcomes.

31 Construction Documents (Templates Included): Construction projects come in all shapes and sizes, but all must be monitored closely. This is why a project has many construction documents. Building a structure is a complicated job and every aspect of it requires construction drawings to plan... Read More The post 31 Construction Documents (Templates Included) appeared first on ProjectManager. #ProjectManagement #Innovation

Substantial Completion in a Construction Project.

Maximising Efficiency in Construction: Boosting Productivity and Production Rates Maximising Construction Efficiency: Insights from Project Management and Delay Analysis Aligned with Mastering Construction Project Management and Forensic Schedule Delay Analysis, this book explores essential strategies for increasing efficiency in today's fast-paced construction industry. The shift from direct labour to subcontracting has transformed work management, making it critical to focus on production rates and productivity, key factors for project success. Learn how contractors and subcontractors can collaborate to optimise efficiency, from labour usage to equipment availability. Key Insights from the Book: Production Rates and Productivity: Understand how production rates and productivity drive project progress, and how labour skills, equipment condition, and site factors influence costs and timelines. Examples of Production Rates: Explore real-world examples, like excavation at 20 cubic metres per hour or bricklaying at 1,000 bricks per day, offering benchmarks for assessing your project’s performance. Incentivising Subcontractors: Learn how performance-based incentives, bonuses, and lean construction methods can boost subcontractor productivity, with clear communication and real-time monitoring. Why You Should Buy This Book If you're aiming to improve efficiency in construction projects, this book offers actionable strategies for enhancing production rates and productivity while controlling costs. Whether you're a seasoned professional or an emerging manager, the insights are invaluable. Maximising Construction Efficiency: Affordable Insights For a limited time, the book will be available at an affordable price. I’ll also offer personal advice on typical production rates for various trades, helping you apply these concepts to your projects. Warm Regards, Michael Harvey

Keeping your construction project on track? ️ Our blog shares 5 powerful tips for effective construction management to help you hit deadlines, stay on budget, and avoid headaches! Read it now and share it with your network! #construction #projectmanagement #tips Read More: https://lnkd.in/dJeJMuKH

Cost estimation in construction projects is complex, and several common mistakes can lead to inaccurate estimates and potential project issues. Here are some of the most common mistakes: 1. Incomplete Scope Definition: Failing to accurately define the scope of work can lead to missed items in the estimation, resulting in cost overruns later in the project. 2. Ignoring Site Conditions: Not accounting for site-specific conditions such as soil quality, topography, access, and utilities can result in underestimation of costs related to site preparation and construction. 3. Inaccurate Quantity Takeoffs: Errors in quantity takeoffs, such as incorrect measurements or missing items, can lead to significant discrepancies in cost estimates. 4. Overlooking Contingencies: Failing to include contingencies for unforeseen events, changes in scope, or market fluctuations can leave the project vulnerable to unexpected costs. 5. Inadequate Historical Data: Relying solely on historical data without considering current market conditions, technological advancements, or changes in regulations can result in outdated or inaccurate estimates. 6. Optimistic Assumptions: Making overly optimistic assumptions about productivity rates, material costs, or project duration can lead to unrealistic cost estimates. 7. Not Considering Labor Costs: Underestimating labor costs, including wages, benefits, and overhead, can result in significant budget shortfalls during the project execution. 8. Failure to Account for Risk: Neglecting to assess and quantify project risks, such as weather delays, supply chain disruptions, or regulatory changes, can lead to underestimation of project costs. 9. Inadequate Vendor Quotes: Accepting vendor quotes without verifying their accuracy or comparing them to market rates can result in inflated costs and budget overruns. 10. Lack of Review and Validation: Failing to review and validate the cost estimate with relevant stakeholders, including project managers, engineers, and finance professionals, can lead to oversight of critical details and errors in the estimation process. By being aware of these common mistakes and implementing strategies to mitigate them, construction professionals can improve the accuracy of their cost estimates and minimize the risk of budget overruns during project execution. Regular review, collaboration, and reliance on accurate data are key to successful cost estimation in construction projects.