Course Presentations 2 Introduction to Construction Industry

8/12/2019 Course Presentations 2 Introduction to Construction Industry

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ARE 459

CONTRACTS & SPECIFICATION

CLASS -2

ByBy

ZulfikarZulfikarAliyuAliyuAdamuAdamu

LECTURERLECTURER

AREARE DEPTDEPT

INTRODUCTION TOINTRODUCTION TO

CONSTRUCTION INDUSTRY


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Presentation OutlinePresentation Outline

Introduction to Construction Industry Nature and general characteristics

Difference between Construction & Manufacturing Industry

Size of Construction Market

Construction Industry in Saudi Arabia

Present & Future

Size of Construction Market in Saudi Arabia

Example: Major Projects ( attached in Handout)

Construction Team: Principal Parties

The Owner

The Design professional

The Contractor

Construction Project Life Cycle


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Objectives of Class :Objectives of Class :

To provide an overview of construction Industry, including

Its characteristics and Size

To understand the difference between construction & other

industries

To present the trends of the construction industry in Saudi

Arabia

To identify key players in construction industry


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Construction Industry Overview

Construction covers a wide range of products, services and

activities.

The Construction industry is an important part of the nations

economy.

The U.S. Construction industry statistics,

Source: CSI


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Too Many Participants

Construction Industry involves many people, organization, agencies,

ministries, designers, contractors, project managers, equipment suppliers,

material suppliers, testing Laboratories.)

Construction Industry: Nature & Characteristics

ContractorContractor

ArchitectArchitect

OwnerOwner

EngineerEngineer

SuppliersSuppliers

SubsSubs

VendorsVendors

PublicPublic


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Too Many ParticipantsJob

Supervisors

Owners

Corporate

Managemen

t

Field Labor

Design

Center

Sales &

Marketing

Accountin

g

Scheduling

Purchasin Estimating

Local

Municipalitie

s

Banks &

Mortgage

Lendors

Manufacturers

Suppliers

RE Agents

Subs


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Construction projects are Unique, complex, large

Low tech

Construction Industry best described as fragmented industry.

Various types of constructionRisk dominated Industry

Temporary

Construction Industry: Nature & Characteristics (Contd)


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Construction Industry Versus Manufacturing Industry

What differentiates the construction industry from other industrWhat differentiates the construction industry from other industries isies is

that its projects are large, built onthat its projects are large, built on-- site (the factory is brought to the jobsite (the factory is brought to the job

site), and generally unique.site), and generally unique.

Organizations change from Project to Project

On-site work stations are not permanent

Operations are conducted outside and thus subject to weather

Construction can involve large-scale heavy assemblies that can bedifficult to handle and fasten

The owner is usually highly involved in the construction process

while the purchaser of manufactured goods is not


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Construction versus ManufacturingConstruction versus Manufacturing

ConstructionConstruction focuses on the production of afocuses on the production of asingle uniquesingle unique end productend product

Ex: Nuclear Power Plant, Hospital, Dams, etcEx: Nuclear Power Plant, Hospital, Dams, etc

ManufacturingManufacturing products eitherproducts either mass producedmass producedor batch producedor batch produced

Construction Variables: SIZE &COMPLEXITYConstruction Variables: SIZE &COMPLEXITY

Project formatProject format the production of single uniquethe production of single unique

unitsunits


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Construction versus ManufacturingConstruction versus Manufacturing


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Size of Construction Industry

Construction activity is tracked by a number of organizations:

Engineering News Record (ENR), a US magazine

which produces annual tables of performance and

construction activity.

The Monthly Construction Contracts Awards Index

(MCCAI), prepared by NCBs Economics

Department, gives an estimate on the futuredirection of construction activity in the Kingdom.

The Central Department of Statistics (CDS)


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Tables show big contractors and consultants and turnoverSize of Construction Industry


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Tables shows Top 20 Designers and turnoverSize of Construction Industry


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Size of Construction IndustryConstruction activity is tracked by a number of organizations:

Engineering News Record (ENR), a US magazine

which produces annual tables of performance and

construction activity


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Construction Industry in Saudi Arabia:

Present & Future

The construction industry is the largest nonThe construction industry is the largest non--oil economic sector in theoil economic sector in the

Kingdom of Saudi Arabia.Kingdom of Saudi Arabia.

The construction sector also employs over 14 per cent of the totThe construction sector also employs over 14 per cent of the total workforce inal workforce in

the Kingdom.the Kingdom.

Construction activities in Kingdom have a direct correlation witConstruction activities in Kingdom have a direct correlation with oil prices.h oil prices.

If the Price of BRENT CRUDE $ / BARREL Increases, the KingdomIf the Price of BRENT CRUDE $ / BARREL Increases, the Kingdoms totals total

revenues grow and subsequently there is an increase in total valrevenues grow and subsequently there is an increase in total value of publiclyue of publicly

announced construction contracts.announced construction contracts.

During the last 5During the last 5--yearperiod, average construction investment in Saudi Arabiayearperiod, average construction investment in Saudi Arabia

is estimated at SR73 billion per year,is estimated at SR73 billion per year,

The privatization drive, which is currently underway in Saudi ArThe privatization drive, which is currently underway in Saudi Arabia, will have aabia, will have asignificant impact on the construction industrysignificant impact on the construction industry


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The Construction TeamThe principal participants/key players in any construction

project include:

The Owner

The Design Professional (Architect & Engineers)

The Contractor


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The Construction Team

ARCHITECT CONTRACTOR

CONTRACT CONTRACT


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The OwnerThe owner, (also called the client)

The owner is responsible for:

Funding and paying bills for the construction of project.

Determining what the project will include (also calledthe scope of the project), when the project can begin

and must end (the schedule),

Receive the ultimate benefits of the finished project.


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The Owner ( Contd..)Owner organizations can be broken into two major

categories, public and private.

A public agency exists for the ultimate benefit of the

citizens, the general public. Examples of public

projects:, an highway, or an University.

A private organization can be described as any

individual, partnership, corporation, or institution that

builds a project for its own use or for resale.

The owner enters into separate contract with Architect and

contractor.


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The Design ProfessionalThe major role of the design professional:

Is to interpret or assist the owner in developing the project's scope, budget,

and schedule and to prepare construction documents that will be used by the

construction contractor to build the project.

The architect typically sub-contracts portions of work to other design

professionals such as structural engineers, landscape architects, electrical &

mechanical engineers

In almost all cases the design professional is a licensed, registered professional

who is responsible for the physical integrity of the project.

In the United States each state licenses architects and engineers who are allowed

to practice within that state.

Engineering Committee in Saudi Arabia grants licenses to architects and

engineers.


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The Contractor

The contractor is entity that enters into a contract with the owner to construct

the project

The Contractor is responsible :

for the interpretation of the contract documents and the physical

construction of the project rests with the construction contractor

In a traditional arrangement where the owner, design professional, andcontractor are separate companies, the contractor is termed a prime

contractor and is contractually responsible for delivering a completed project

in accordance with the contract documents.

In most cases the prime contractor divides the work among many specialty

contractors called subcontractors. On a large project these subcontractors may

also divide up the work into even smaller work packages


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CONSTRUCTION INDUSTRY


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Major Project Phases

The major phases in the project cycle that are common to most design and

construction projects are :

Project Planning

Design

Schematic Design

Design Development

Contract Documents

Construction Procurement (Bidding Phase)

Construction

Occupancy


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CONCLUSIONThe construction industry is an important part of the nations economy as

major contributor to economy and major employer

Construction activity is tracked by a number of organizations: Engineering News

Record (ENR), a US magazine produces annual tables of performance and

construction activity

The principal participants/ key players in any construction project include:

The Owner/The Design Professional and The Contractor.

Construction activities in Kingdom have a direct correlation with oil prices.

Course Presentations 2 Introduction to Construction Industry

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Transcript of Course Presentations 2 Introduction to Construction Industry