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What is a bond and describe the three types of bonds.
Bonds are an agreement between 3 parties. The surety(Bonding company) becomes liable to the obligee(Owner) for the failure of the principal(Contractor) to meet a determined obligation.
1. Bid Bond - Guarantees contractor will enter contract with owner for bid price
2. Performance Bond - Guarantees contractor will perform work in terms of agreement
3. Payment Bond - Guarantees contractor will pay bills
What is insurance and what are the two types of construction insurance?
Insurance coverage begins at the start of construction and remains until substantial completion.
1. Builders risk insurance - covers fire, lightning, explosion, vandalism, theft
2. Installation floater - covers subcontractor work and materials
What is Value Engineering and what is the proess steps?
VE is the use of professional effort to optimize overall facility costs using a planned and systematic approach. Five key aspects: quality, function, cost, worth, safety.
- Steps to VE:
- 1. Determine justifiable level of effort
- 2. Develop plan
- 3. Gather design and cost information
- 4. Conduct workshop
- 5. Evaluate and make decisions
- 6. Implement approved ideas
- 7. Follow up and lessons learned
What are the 6 phases of project delivery system?
1. Planning - identify and define the need, problem, assess alternatives, establish budged and completion date.
2. Definition - Prepare project scope
3. Implementation - design, tendering award, construction
4. Commissioning - Process of advancing the project from static completion to full working order.
5. Operation - establish reliable operating systems and maintain operating and maintenance.
6. Evaluation - assess the project in planned vs actual performance.
What is Procurement?
Process of obtaining materials, labour, and supplies for a project. Covers the entire cycle of aquiaring goods and services.
What are Liquidated Damages?
Parties agree in advance to damages payable in-case of breach of contract. Results in a daily sum paid by contractor or owner in case of delay.
What is a work breakdown structure?
Breaks the work into smaller packages that can be assigned cost and materials. They are detailed tasks and subtasks.
What are Alternates?
- A request for a price for substituting one material for another, for adding to the scope of work.
- It is beneficial for the owners to explore new concepts and design options.
- Occurs after the request for tender and before tender acceptance.
What is a joint venture?
a relationship between two or more companies who unite to forma single company for a specific undertaking.
What are the 4 types of ownership and pros/cons?
- 1. Sole proprietorship
- Pros: easy to start up, owner retains all profits, easy to dissolve
- Cons: limited financial capacity, unlimited liability, single perspective on business decisions.
- 2. Partnership
- Pros: Each partner is liable for debts and profits, combined financial resources
- Cons: unlimited liability to the third persons, any partner can bind the company into responsibilities without the authority of the other partners
- 3. Corporation
- Pros: limited owner liability, extended financial resources, uninterrupted life of the company.
- Cons: Costly to start, strict government regulations
What are the post execution dispute methods?
- 1. Mediation - Voluntary and non binding
- 2. Dispute resolution board - non binding
- 3. Mini trial - voluntary and non binding
- 4. Arbitration - binding
- 5. Litigation - time intensive and unpredictable outcomes
What are some methods to avoid disputes between owners and contractors?
- -Team approach and partnering
- -appoint project neutral facilitator
- -seek professional legal advice prior to signing
- -keep good records
- -hire reputable contractors
What is the purpose of a contract and what are the 6 documents in a contract?
Contracts define the roles and responsibilities of each party, assign risks, and layout payment method and scope of work.
1. Agreement - legally binds the parties and defines the relationship
2. General conditions - boilerplate
3. Supplementary conditions - specific owner requirements
4. Drawings and design details - main form of project requirement communication
5. Technical specs - qualitative requirements
6. Schedules, performance bonds, insurances
What are the prerequisites for partnering?
- -honest communication
- -ongoing performance evaluations
- -timely issue resolution
What are the four major construction sectors?
1. Residential - close working relationship with owner and mostly wood proudcts
2. Commercial - specialty workers using a variety of construction materials
3. Industrial - highly specialized experts using primarily concrete and steel
4. Heavy highway - large quantities of small materials and heavy equipment, usually financed by the public.
What are the 3 construction delivery methods and the risk allocation?
1. Design build - contractor assumes design and construction risk, owner assumes financial risk
2. Design, bid, build - contractor assumes financial and construction risk, engineer assumes design risk.
3. CM - owner assumes financial and construction risk, engineer assumes design risk.
What are 3 main evaluation systems?
- 1. LEED
- 2. Living building challenge
- 3. Green star
What is the timeline for project tender process?
- 1. offer to tender
- 2. amendments to tender call - issue addendas
- 3. Pre-tender meeting
- 4. Reciept and opening of tenders
- 5. Tender review - determine the lowest acceptable and valid tender
- 6. Contractor's evaluation
- 7. Contract award
what is BOOT?
Build, own, operate, transfer
long term, sophisticated deal with single point responsibility.
What is Turnkey contract?
contractor takes full responsibility for producing a fully operating facility.
What is Logistics?
Activities necessary to manage the flow and storage of goods from origin to point of consumption.
What is a kick-off meeting and when does it occur?
- meeting before construction starts between owner and contractor.
- Outlines construction processes, calls attention to critical project elements, and reviews safety procedures.
What is an Addenda and when is it implemented?
change to the project documents after the request for tender and before tender submission.
What is a near miss?
unplanned event that did not result in injury, illness, or damage but had the potential to.
Describe the difference between general and supplementary conditions and what is the order of priority.
General conditions are the base of the construction contract. These are often the standard construction contract document. Supplementary conditions are used to tailor the contract documents to specific project requirements. This is a customized section to modify the general conditions.
Supplementary conditions supersede general conditions.
What are the key components of a project charter?
- 1. Project description
- 2. Need/opportunity
- 3. Goal
- 4. Objectives
- 5. Success criteria
- 6. Stakeholders
- 7. Risks