Course Presentations 2 Introduction to Construction Industry
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Transcript of 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.