Questions and Answers of Construction Project Management

Look up the names of the largest contractors reported by ENR in its three main categories: Heavy and highway, nonresidential building, and multiunit housing. Notice that the list also includes their
There have been many construction marvels in human history, of which this chapter mentioned only a few. Comment on three historical projects of your choosing not included here. Examples include the
What advantages do you see in consolidating the roles of owner, designer, and constructor shown in Figure 1.10? What disadvantages could it have?Figure 1.10 Owner Constructor Designer
Give examples of the management levels in construction shown in Figure 1.12.Figure 1.12 Hierarchical Level Focus on field action and technological processes Organizational Project Focus on project
What are the three major types of construction bonds? Why are they required? Name three items that affect bonding capacity.
In what major section of the contract is the time duration of the project normally specified?
Who are the three basic parties involved in any construction bonding arrangement?
What type of bond guarantees that if a contractor goes bankrupt on a project the surety will pay the necessary amount to complete the job?
What is the purpose of the following documents in a construction contract?a. General conditionsb. Special conditionsc. Addendad. Technical specifications
Why is the contractor normally required to submit a bid bond when making a proposal to an owner on a competitively bid contract?
What is the Miller Act and what does it specify regarding government contracts?
What is the purpose of the notice to bidders?
List the various specialty groups that are normally involved in the design of a high-rise building project.
How much money is the contractor investing in an advertised project available for bid at the time of:a. Going to the A/E’s office or checking the Web to look at the plans and specifications?b.
What are the major parameters to be considered in the prequalification assessment of a contractor? Investigate the local criteria used in the prequalification of both small housing and general
Obtain sample specification clauses relating to the quality of finish of an item such as face brick, exterior concrete, or paint surfaces. Who has the major responsibility for the definition,
Read those clauses of the general conditions of the contract for construction that refer to the owner, architect, contractor, and subcontractor. Then list the major responsibilities of these
An architect asks $100,000 for the architectural design of a new building. However, after the preliminary design is completed, the owner and the architect decide to stop the design process. How much
Visit the Dodge Data & AnalyticsTM website and find the three largest projects currently being bid in your state in the categories.
Obtain copies of the American Institute of Architects (AIA) standard contract documents and compare them with other standard contracts (e.g., Engineers Joint Contract Documents Committee (EJCDC)
What is the difference between liquidated damages and a penalty for late completion of the contract?
What is the purpose of retainage?
During what period can a contractor withdraw the bid without penalty?
As a contractor you have built a 100-unit apartment complex that rents for $450 per unit a month. For late completion, you were assessed $2,000 per day. Would you qualify the assessment as liquidated
Describe the procedures to be followed for the receiving and opening of bids. If possible, attend a bid opening and determine the number of bids that were submitted. For several unsuccessful bids
Scan a typical stipulated sum contract and identify those clauses that prescribe, modify, or are related to time considerations. Then develop a chronological timeline (similar to Figure 3.1) for the
Describe the procedure to be followed by the contractor who wishes to claim a time extension. What sort of documentation do you think is necessary to either refute or defend a time extension claim
Must a contractor accept and perform all the work involved in each contract change order? Is there a limit to the number or magnitude of change orders that can be applied to a contract? When can a
List the common causes of changed conditions in a building contract. What typical contract clauses bear on the problems caused by changed conditions? Suppose separate contracts are let for the
Prepare a punch list of deficiencies or repairs that you consider necessary for your room, garage, or classroom. Can any of these items be related back to the original acceptance of the facility?
How would you go about either documenting a claim for a contractor’s progress payment or its verification by the contract administrator for a typical building project in your locality?
Fudd Associates, Inc. submits a bid for $20 million. Mr. Fudd discovers at bid opening that all other bids are over $25 million. It is obvious that there is a mistake in his cost estimate. Could he
A contractor signs a contract for the construction of a $150 million ship harbor expansion. Before the Notice to Proceed is issued, a hurricane passes near the area and substantially changes the
Alright Construction, Inc., signs a contract with Casa Del Monte, Inc., to build five new 20-room modules for a large tourist resort in a Caribbean country. Casa Del Monte establishes liquidated
Name and briefly describe each of the two basic types of competitively bid construction contracts. Which type would be most likely used for building the piers to support a large suspension bridge?
If you were asked to perform an excavation contract competitively with limited boring data, what type of contract would you want and why?
Name three ways the construction contract can be terminated.
Name two types of negotiated contracts and describe the method of payment and incentive concept.
What is meant by unbalancing a bid? What type of contract is implied? Give an example of how a bid is unbalanced.
Why is cost plus a percentage of cost type of contract not used to a great extent?
Under what circumstances is a cost-plus contract favorable to both owner and contractor?
Valid contracts require an offer, an acceptance, and a consideration. Identify these elements in the following cases:a. The purchase of an item at the storeb. The hiring of laborc. A paid bus rided.
Suppose you are a small local building contractor responsible for the construction of the small gas station in Appendix F. List the specialty items that you would subcontract.
Visit a local building site and ascertain the number and type of subcontracts that are involved. How many subcontracts do you think may be needed for a downtown high-rise building? Why would there be
From the point of view of the owner’s contract administrator, each different type of contract places different demands on supervision. List the significant differences that would impact the
Visit a local contractor and determine the proportion of contracts that are negotiated against those that are competitively bid awards. Is this percentage likely to change significantly with small
The first progress payment received by the contractor is signified by the first vertical segment of the income curve in Figures 4.1, 4.2, and 4.3. Why is this first payment shown at the end of the
Some people feel that lump-sum contracts can foster a more contentious work environment than any of the other types of contracts discussed in this chapter. What is the basis for this perception? Do
An architect and a general contractor join forces and win a DB project contract. What risks could this arrangement have, from the owner’s perspective? What advantages could this ad-hoc enterprise
Comment on the advantages of the DB approach to project delivery that the Design-Build Institute of America (DBIA) provides on its website (www.dbia.org). Does the DB approach have any potential
Name the three principal forms of business ownership in construction and state the liability limits of the owners in each case.
Which legal structure is most difficult to establish and why?
Name three types of partnerships.
Describe briefly two advantages and two disadvantages of a corporate form of business organization as compared to a partnership.
Jack Flubber, who owns Sons of Flubber Construction Co., and runs it as a proprietorship, had gross profits last year of $80,000. His personal and family expenses are $52,000 and he has $7,000 in
What is meant by the term foreign corporation?
What would be the advantages of organizing as a subchapter S corporation?
Is it possible to characterize the legal structures of local contractors using the Yellow Pages as a guide?
What steps must be taken to set up a partnership? How can a partnership be dissolved?
In problem 5.5, what taxes would Jack pay if he organized as a closely held corporation (as described) and, after paying his salary, also issued himself a dividend of $10,000?Problem 5.5Jack Flubber,
What is the difference between par and book values of corporate stock? If an incorporated construction company wins a large cost plus fixed-fee contract, what impact might this have on the market
Uncle Fudd has decided to sell his ownership in Cougar Construction, Inc., to Cousin Elmer. How would the legal firm handling this transaction determine a fair price per share?
What is a limited liability corporation? Discuss its advantages and disadvantages. You can search the Internet for the brief IRS Publication 3402, Taxation of Limited Liability Companies, which
Many banks and similar lending institutions require that the chief executive officer (CEO) of small corporations (which usually are owned by the CEO and a few relatives) cosign any loan made to the
A stock market, such as the New York Stock Exchange (NYSE) or NASDAQ, trades shares (stock) of public corporations. What are some advantages of becoming public, from a corporation’s perspective?
Explain in your own words the concept of marginal tax rate.
Does a single individual making $500,000 pay the same marginal tax rate as another making $1 million? Explain.
You decide to sell a house that you bought five years ago with the purpose of renting it. Its purchase price was $300,000, and now its market value is about $500,000. How much should you expect to
What is the average tax rate paid by a single person with a $60,000 adjusted gross income for 2015?
What is the name of the amount of money that can be deducted directly from the computed tax, instead of from the adjusted gross income?
Which business enterprises pay untaxed profits to owners/partners who then pay the taxes on their individual returns?
A corporation had a net income before taxes of $1.2 million for 2015. Find the tax liability for this company.
Pegg Construction, a partnership of three brothers, had a net income before taxes of $300,000. The brothers have agreed that all profit will be shared in equal parts. John Pegg is single and has an
Let us assume that we own our personal residence. One question of interest is, “If we depreciate real property (e.g., land, buildings, etc.), can we depreciate the house in which we live?”
Why are governments willing to agree to accept the concept of depreciation, which leads in many cases to a considerably lower level of taxation for business entities? The answer to this question
Calculate the base value or “lump sum” for each of the “single” and “married filing jointly” 2016 brackets given in Table 6.4.Table 6.4 ITABLE 6.4 Corporate Income Brackets and Tax Rates,
Verify the 5- and 7-year property class percentages by applying the 200% DB approach to a piece of equipment with a nominal value of $1,000. For the 7-year property class, in what year is the switch
Why do you think the 150% DB method is used as the basis for depreciation for 15-year and 20-year classes of equipment?
Find the yearly depreciation of a $100,000 five-year class concrete mixer, first assuming that it is new when purchased, and then that it is purchased as used equipment.
Develop cost codes for each element of the WBS shown in Figure 7.4. If you assign the account number 01-00-00 for the overall project, then a good account for the packaging and service area could be
Develop a two-level WBS consisting of at least 16 work packages for the building of the Brooklyn Bridge.
Develop a preliminary WBS for a small one-story commercial building to be constructed on the site of an existing small-frame structure. It is 30 by 60 feet in plan (see illustration). The exterior
Describe how you would develop a subcontracting plan for the construction of a small child-care facility.
A WBS shows a work package called Window Sill Flashing as a child task of Exterior Masonry and Windows. Both parent work packages are at the same immediately preceding level in the WBS. The masonry
The project manager of the gas station project shown in Figure 7.3 needs to change the project’s WBS so that it can be compared with cost and productivity information collected by the company.
Develop the precedence diagram network for the following project and then calculate the TF and FF for each activity. Mark critical activities with an asterisk. Activity a b C d e f 8 h j k Duration
Make a clear and neat sketch of the network specified below using precedence notation. On the precedence diagram calculate and show the early start (EST), early finish (EFT), late start (LST), late
From the following network data, determine the critical path, starting and finishing times, and TFs and FFs. Activity Description ST A B D E F G H I J END Start milestone Excavate stage 1 Order,
Using the information given in the figures below, develop a precedence notation CPM network for the bridge project described. Certain logical relationships are implied by the bar chart that has been
You need to provide a project’s owner with a three-week look-ahead schedule. Identify one benefit and one limitation of using a bar chart for the look-ahead schedule.
Develop an activity diagram for the following activity list. Label each activity and minimize crossing relationship lines. Activity A B D E F G H I K L M N O P Immediate Successors Z F N K, J G A, M
Why is it that all critical activities have TF of 0? Consider the definition of TF in your response.
(a) Using PERT, calculate expected project duration and determine the critical path in the network defined by the data below. (b) What is the probability of completing this project in 32 weeks or
(a) Given the data below for a small pipeline project, based on a PERT analysis what is the expected project duration?(b) What is the probability of completing this project in 120 days or less?
Consider the road job described in Figure 9.5, which consists of 14 road sections to be completed. The objective chart for this job is given. Assume that each month consists of 20 working days on
The objective chart for a 10-story building is show below. Each floor is divided into four sections (A, B, C, and D). The production for a typical section is shown in the objective chart. Calculate
Given the following charts, calculate the LOB quantities for July 1. What are these charts called? 40 Cumulative # of Units A B 32 1 24 C 2 D 3 4 E Lead time in work days 15 MAR APR MAY JUN JUL AUG
Discuss at least three disadvantages of PERT that, in your opinion, have contributed to its limited use. Do not include the shortcomings. Instead, discuss the challenges that it may encounter in its
How would you improve the popularity of LOB in the United States?
Examine the bar chart schedule with the activities and their durations as shown in the figure. The table shows how many resources an activity uses. Draw a histogram of resource use over time. Perform

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