3.0 Cost Management

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Presented by: [name]

[date]

Overview of CMAA’s Standards of Practice

Benefits of attaining CCM credential

The practice of professional management applied to the planning, design, and construction of projects from inception to completion for the purpose of controlling time, scope, quality and cost.

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Establishes industry standards

Serves as a guide to range of services

Does NOT limit methods and procedures

Is delivery system neutral

1.0

2.0

3.0

4.0

Introduction

Project Management

Cost Management

Time Management

5.0

6.0

7.0

8.0

Quality Management

Contract Administration

Safety

Program Management

9.0 Sustainability

10.0 Risk Management

11.0 Building Information Modeling (BIM)

o

Construction Management defined o o is the practice of professional management applied to the planning, design, and construction of projects from inception to completion for the purpose of controlling time, scope, cost, and quality.

the application of integrated systems and procedures by a team of professionals to achieve the owner’s goals o

10 functions that are not mutually exclusive, but are related and integral components of the Construction Management process presented in the following phases: o o o o o

Pre-Design

Design

Procurement

Construction

Post Construction o

Key Definitions relevant to Construction Management

o

2.0 o

Project Management

Key components of a Project Management Plan and its development throughout the various project phases. In general terms it outlines key goals and elements of managing a project under the Construction Management format o

3.0 o

Cost Management

Guidelines for the CM to assist the team members in managing, controlling, and monitoring project costs during all phases of a project through an integrated and comprehensive cost management system.

o

4.0 o

Time Management

An integral part of the CM’s responsibilities on a project. This responsibility is met when the CM makes the most effective use of people, equipment, materials, and funds relative to time.

o

5.0 o

Quality Management

Key goals, philosophies and elements of providing services while enhancing quality in the planning/design/construction process, the Construction Management services and ultimately, in the constructed facilities.

o

6.0 o

Contract Administration

Addresses the administrative tasks of the CM during project execution and the administration and reporting requirements for all construction contracts.

o

7.0 o

Safety

Focuses on the subject of providing safety management services to the owner if so required by the owner.

o o

8.0 o o o

Program Management

Discusses Program Management which, in the context of the construction industry, is the application of Construction Management to large, complex or multiple capital improvement projects.

A Program Manager (PM) is generally assigned the responsibility of managing all of the resources and relationships necessary to achieve an owner's desired outcome.

Depending on the owner’s organization and needs, Program Management services may be provided by in-house personnel or contracted to a qualified consultant o

9.0 o o

Sustainability

Discusses the expanding subject of sustainability as it pertains to the role of the CM.

It outlines in general terms key goals, philosophies and elements of sustainability.

The general philosophy is to be incorporated with other key elements of the construction management plan including cost time and quality management as well as within the Project Management Plan.

o

10.0 o

Risk Management

Provides the CM with a guide to a standard implementation of risk management on a project.

o

11.0 o

Building Information Modeling (BIM)

Provides a brief summary of the CM’s role and responsibilities in implementing BIM on a project by phase. The CM must also accept the following general responsibilities related to the BIM process: o o o

The CM has the responsibility to stay current and remain educated on the BIM process.

The CM has the responsibility to educate the owner and the project team on the benefits, features, limitations and the implementation process for BIM.

By educating its own personnel and the rest of the project team, the CM has the opportunity to continue its leadership role in the project delivery process with appropriate application of BIM.

Project Management

Cost Management

Time Management

Quality Management

Contract Administration

Safety

Program Management

Sustainability

Risk Management

Building Information Modeling (BIM)

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Pre-Design*

Design

Procurement

Construction

Post-Construction

*optimum time to engage CM

© Construction Management Association of America. Do Not Duplicate or Reproduce.

CMAA Capstone: History of Construction

Management

CM Standards of Practice, 2010 Revision

CMAA Contract Administration Procedures

CMAA Cost Management Procedures

CMAA Quality Management Guidelines

CMAA Time Management Procedures

CMAA Sustainability Guidelines 2010

Model Contract documents

CM At-Risk

CM Agency

© Construction Management Association of America. Do Not Duplicate or Reproduce.

As qualified to a construction project,

the use of integrated systems and procedures by the project team to accomplish design and construction.

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Construction Management Plan

Project Procedures Manual

Quality Management Plan

Procurement Plan

Contracts or Agreements

Laws

Standards of Care

© Construction Management Association of America. Do Not Duplicate or Reproduce.

The CM plays a key role in Cost Management during all phases of a construction project: planning, design, bid/award, construction, and closeout

The CM is the cost professional on the project

Cost management must be established and implemented at the outset and continued throughout the project

CMAA procedures intended to help the CM with this role

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Objectives

Control Cost

Deliver within Budget

CM’s Role in Cost Management

Cost Management Plan (CMP), aka Project Money Plan

Deliver within Budget

Financial forecast

Control project costs and cash flow

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Cost Control Responsibilities

•All communications must include the CM

•CM must attend all meetings

•CM must report accurately and regularly to the Owner

CM must ensure that the project is delivered in the most economical way conforming to project requirements

© Construction Management Association of America. Do Not Duplicate or Reproduce.

•CMs most often cite delivering projects on time as their biggest challenge

•Time has the least amount of flexibility; it passes, no matter what

•Schedule issues are one of the main reasons for conflict on projects

•Accurate, initial schedule development and continued ongoing maintenance is paramount to:

•Avoiding claims

•Providing a solid basis for quantifying time impacts

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Essentials CM needs to manage:

-

Sufficient level of detail

- Inflated durations to hide float

- Logic ties to hide true critical path

- Missing or incorrect logic

- Arbitrary milestones: non-logic driven

- Open-ended activities

- Primary and secondary critical paths

- Phasing

- Regulatory requirements

- Code compliance / inspections

- Long lead procurement items

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Changes/Claim Process

CHANGE ORDERS & CLAIMS

Schedule status prior to change

Change Fragnet: Check Logic & Durations

Recovery

REVISED SCHEDULE

Run original, and revised schedules until approved

Tie to change order and negotiations

© Construction Management Association of America. Do Not Duplicate or Reproduce.

To Manage Project Time/Resources/Cost

Good Schedule, Accurate Forecasts

To Integrate Multiple Parties

Owner, Contractor, User, Community

To Evaluate Options

Changes, Delays, Acceleration

To Resolve Disputes

Arecibo Space Telescope, Puerto Rico

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Quality - Can be subjective

Quality Control - Contractors responsibility

Quality Assurance -

CM’s responsibility

Quality Management - Encompasses all aspects of quality

Quality Management Plan

– a team responsibility

© Construction Management Association of America. Do Not Duplicate or Reproduce.

A project specific, written plan, prepared for certain projects which reflects the general methodology to be implemented by the CM during the course of the project – to enhance the Owner’s control of time, cost, and quality through a process-oriented approach to the various management tasks for the program

-

Understanding of roles

- Control time, cost, and quality

- Should be done early in the project

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Retainage as a quality tool

Format for authorizing extra work

Partial payments

Withholding payment

© Construction Management Association of America. Do Not Duplicate or Reproduce.

A real QA issue

Various methods available

Propose and agree upon the process early, but most importantly…

Establish the mind-set about the desired / expected quality of the work

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Objectives are to control:

- Time

- Cost

- Quality

- Information

- Safety

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Develop the following

:

- Construction Management Plan

- Project Procedures

- Management Information System

- Quality Management Plan

- Communications Procedures

- A master schedule, a milestone schedule

Identify possible project delivery methods

Manage designer selection / contract form

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Organization

Project Documentation

Tracking and follow-up

Software utilized

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Employee Safety and Health

- Safety program / accident prevention program

- Management and employee accountability

- Safety orientation

- Hazard recognition and awareness training

• Usually, the contractor provides “safe” access to the work for inspection

- Employee guidelines for handling safety issues

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Management commitment

Accountability

Employee buy-in

Hazard communication

Safety should be equal to current programs

Establish a safety committee to help develop the plan

© Construction Management Association of America. Do Not Duplicate or Reproduce.

In the context of the construction industry, program management is the application of

Construction Management to large, complex or multiple capital improvement projects.

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Owner’s road map to success

Defines vision, strategy, schedule and budget criteria, policies, procedures and standards.

Provides a level of continuity and standardization

Common features of a sustainable project

Customize construction management tools for a project with sustainability goals and requirements

Sustainability Plan

Sustainability Review

CM leadership to achieve a project’s sustainability goals and requirements

Evaluate the effectiveness of management systems in achieving a project’s sustainability goals

Risk Identification

Include those with most project knowledge

Facilitate open thinking during identification

Identify potential impacts of risks identified

Keep expectations realistic

Develop a tracking report (Risk Register)

Risk Analysis

Likelihood

Severity

Categories risk element

Establish accountability

Prioritize efforts

Synthesize risk

Communication and Reporting

Tracking

Mitigation

Resolution

Avoidance

Mitigation

Transfer

Acceptance

A process by which a representation of physical and functional characteristics of a facility are captured in a digital model, analyzed, documented, and assessed virtually, then revised iteratively through the design and construction process

39

Can vary significantly from project-to-project based on the extent of adoption of the BIM process and the selected project delivery method

At the project outset, the CM must guide the project team in the selection and adoption of the most appropriate and best-fit BIM approach based on: o o o o

Project Characteristics

Owner Buy-in

Project team Capabilities

Cost-Benefit Considerations

40

To fulfill his/her role and meet his/her responsibility through the project, the CM must:

1.

Stay current on the BIM process

2.

Educate the Owner and project team on the benefits, features, limitations of BIM

3.

Maintain its leadership role in the project delivery process with appropriate application of BIM

4.

Have clear communication with the stakeholders during the implementation of BIM

Person who has met prescribed criteria of the CCM program relative to:

Formal education and general construction industry experience

Documented, successful Construction

Management experience

Demonstrated capability and understanding of

CMAA Body of Knowledge

Defines its own Standards of Practice and values

Identifies those best qualified to practice

Construction Management

Offers an assurance of quality to those who employ Certified Construction Managers

The “Culture of Certification” describes a business environment in which it is simply assumed, at all levels, that the best and most committed

Construction Managers will be CCMs, and in which organizations actively and consistently support their people in obtaining and maintaining their credentials.

Increasing numbers of organizations, both owner and service providers, are adopting this outlook and focus

Increased professional stature & marketability

Creates opportunity for advancement

Adds value for both employer and client

Tells owners, employers and peers you are a recognized professional.

Employers rewarding achievement with bonuses and salary adjustments

Access to professional community to network with other CCMs

Continuing professional development required to maintain credential

Independent assessment of CM staff knowledge and skills based on national standards

National certification means “portable” credentials

Improved company marketability

Your employees continue to improve

Owners increasingly giving formal preference in evaluations

First

Industry Professional Certification

Program to Achieve ANSI/ISO/IEC 17024

Personnel Certification Accreditation by the

American National Standards Institute (ANSI)

Process and Procedures Adhere to an

International Standard of Excellence that is mobile and in the Interest of Public Welfare

Provides Assurance of Legitimacy

© Construction Management Association of America. Do Not Duplicate or Reproduce.

Must have 48 months Responsible-In-Charge (RIC) experience as a CM/PM as shown on Qualification Matrix AND one of the following:

4-year Degree from an Accredited Educational Institution

Construction Management, Architecture, Engineering (mulitiple disciplines), or Construction Science

Accrediting body recognized by CHEA or the US Dept. of

Education

2-year Degree & 4 years experience in general design/construction

8 Years experience in general design/construction

“Did the decisions that the candidate was empowered to make directly impact the successful completion of the project and was the candidate directly responsible in charge of construction management services and for protecting the interests of the project and the owner?”

PHASE: Pre-design

FUNCTION/ ROLE

Project

Management

Cost Management

Time Management

Quality

Management

Contract

Administration

Safety

Management

RIC

RIC

Design Procurement Construction Post-construction

RIC

RIC

RIC

RIC

RIC

RIC

RIC

RIC

RIC

RIC

RIC

RIC

RIC

RIC

Kate Brundage

Certification Manager

7926 Jones Branch Drive, Suite

800

McLean, Virginia 22102 USA

Tel: 703.356.2622 Fax:

703.356.6388

kbrundage@cmaanet.org

CMAA

Contact

Dennis Doran

VP, Professional Development

7926 Jones Branch Drive, Suite

800

McLean, Virginia 22102 USA

Tel: 703.356.2622 Fax:

703.356.6388

ddoran@cmaanet.org

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