Stipulated or lump- sum contract:
Cost of work plus fee contract.
Cost of work plus fee with guaranteed maximum price (GMP) contract.
Construction management (CM) contract.
Design-build or design-and-construct (D&C) contract.
Factors affecting the global project management process.
Part B: Project- Pre Planning.
Part C. Communication control
Part D. Project Closure.
A fixed or Lump-Sum contract is a contract in which the client receives a lump sum as predicted amount to be used in the project from start to finish. This includes the fees paid for the collection of permits, the estimated fees that will cover all the material needed for the construction from starting of the foundation, the filling of the walls, and the roof.
Contract obligation or amount
A lump-sum contract prevents clients from being exposed to the construction site, clients are authorized to assess any expenditure or overdrafts, which are very important for the amount of money or contract, set out. Also, a lump sum loan or contract allows people to take out a loan because the confidence of greater degree is offered in terms of cost. In particular, Prescribed or Amount Contracts permit company for easy management of the procedure and flow of events planned by the construction company. Lastly, it is worthwhile that Lump-Sum has all the payments made by customers (Zhang, 2016).
Though, the construction company have advantage from the lump-sum contracts when they are on a major profit path with the contract designer. Moreover, the construction company will safeguard the status quo of PESTLE analysis and to do a little research before construction.
Challenges received as a result of lump-sum contracts
All good things have a bad side. After a lot of suitability for a Lump-sum contract, the construction company is at high risk in the event of natural disasters such as earthquakes that could lead to construction collapse before it is fully delivered. Adverse conditions affect the cost of construction. For example, the soil is clay that retains water easily in the rain and puts it at risk of forming soil. Additionally, in the event of a robbery, all construction costs are lost; the construction company is responsible for completing the construction. Also, clients can demand documents for all the steps and costs incurred
Minimizing possible challenges
To free up potential issues in a lump-sum significant contract, adopting secure platforms, potential storing and specific monetizing. Also, the company must maintain various documentation such as accounts, human resources, and all documents that can reduce the doubts.
The discount will be provided based on the contract costs. Charging costs are defined by the environment in which climate change affect the construction process. The construction company should investigate the environmental conditions of the site.
Working with highly skilled contractors means that outstanding work and materials are provided to the board at the construction site. In the legal side, where the building firm is regulated by an anti-trust statute, this also strengthens the client's trust and control over their contractors. Additionally, the risk of overspending is low, and the contract is less costly than others (Burr, 2016).
This contractual approach has the potential to make more payments than expected when purchasing tangible goods and services because of the condition of weather, distance to the delivery centre. Also, there are fewerbenefits to allow for-profit on both sides.
Reducing this challenge compares different prices for different suppliers and finds distributors with more lucrative delivery services without additional charge. Otherwise, service delivery costs should remain constant despite the distance and weather conditions.
For this contract, changes were made in terms of specification and material quality. It includes all the clauses intended to compensate the construction company for recorded losses due to natural and man-made disasters. Also, technical incentives consider this contract as the adoption of modern tools thus, will increase costs.
When advantages affect the construction business, it becomes easier for customers to make purchases through continuous contact. The construction company has a pre-schedule competition as well as maintaining its limited budget to maximize profits and achievements by reducing the penalties that will be recorded. They employ interior designers, architects, hydraulic and electrical engineers, and intermediate residents.
As a result, clients will benefit from the guaranteed maximum price(GMP) agreement in several ways. First, that a high guaranteed value provides security for them so that they will not be penalized for the mistakes made by the construction company and for the negligence that occurs all the way through the project. This follows that due to less uncertainty in terms of cost and accuracy there are fewer surprises or unintended consequences (Hughes, 2015).
A guaranteed price has many advantages with only two cuts that are the most extreme losses incurred by a construction company, and a construction company can claim high project costs thus exploiting clients.
To address these challenges, a platform with standardized building plans should be put in place for environmental conditions. Including economic management and security protection law that protects clients and reduces the incorrect calculations due to the high cost of the construction company (Burr, 2016).
The procurement process involving the designs and the supply of the packages by the construction firm would include this form of contract. The entire process is under the control of the contractor. All these things centralised to the construction company that manages the operations of all the coordinators associated with the construction work.
Benefits of building a management contract
The implementation of a construction management contract increases the value of designs, planning and, construction process. As a result of the increased importance, it is now more difficult to predict the future outcomes of a proposed project, as seen in the planning map shown to clients. They are allowed to choose the company that manages construction in terms of technology and service acceptance. The responsibilities of the construction company also determine the problem of construction management and all necessary permits. During the development of the budget, the manager of the construction company is appointed to oversee all activities and ensure the management decisions success. This significant selection comes before the appointment of a design team to assist with the development of a plan and budget that will be used to provide security for all project funding.
Drawbacks of Construction Management (CM)
The most noticeable weakness is the construction manager's remuneration. It leads to lower rates for construction customers in terms of market prices. Also, the reputation of the construction company will be in jeopardy if the work is not completed within the allotted time (Hughes, 2015).
Reasonable ways of addressing these obstacles include the execution of the project by the construction company according to the project schedule and within the company's budget.
This method of contracting is time-consuming, and it all begins with documentation, where the desired design is drawn up and approved before going forward with the project. Its key benefit is that it is able to monitor the end. Therefore, I advise the client to use this type of contract as it has more accountability.
PESTLE is used to classify issues affecting land project management activities.
Different nations have different rulerships. Some support the given model of construction and others reject these methods. For example, China and the US government have differing views on roof styles and materials. Also, the policy set out in the country’s constitution varies. Better project management follows all the established principles such as political stability that provides a place for better project management.
The demand will fluctuate as the economy expands. Customers must have their project handled before it can begin. Exchange rates fluctuate from time to time, so schedule projects when the exchange rate is at its lowest.
Additional measures are required in a heavily populated area when operating in a populous area. Also, an uninhabited area usually has fewer employees available. Clients can be encouraged to follow a real estate strategy to get the most out of building rental properties in areas with dense population.
Every minute, new things are being done in the construction industry. For improved service and delivery, the construction company must be kept up to date on all new features.This works in combination with technological incentives in this regard.
It goes through all types of discrimination and other legal issues that the project management team can contend with, as well as potential ways to overcome discrimination. This can be done by enforcing anti-trust laws to manage the construction company as a firm.
Unpredicted or unfavourable weather affects the construction company's project management greatly. Construction has to wait until there arefavourable weather and climate.
In order to prepare for the start of project work, project preparation will require all the work that needs to be completed. To make the building project a success construction company faces the numerous challenges related to natural disasters.In such situations, the construction firm would need to research about the current environment and climate change to address the problems associated with natural hazards to find the best solution (Liu, 2017). Having the contractor complete his or her assigned project within the work schedule and within the allocated funds would be an acceptable way to address these challenges. (Liu, 2017).
A basic cost analysis would also be conducted by the contractor prior to the completion of the construction project to minimise typical financial charges. A forum will also include a specified number of construction initiatives about environmental conditions and variables in order to overcome these challenges.Owing to the high costs requested by contractors, this would also reduce the chances of miscalculation. Finally, it could be advisable for the contractor to adopt secure platform for transactions and currency storage.It is also important to coordinate contractors by keeping records of all the processes they conduct in –regards to the construction process (Choudhry & Raza, 2015).
High-quality materials will be designed at a low cost to prevent possible failures related to low-quality materials used in construction. The action plan is a fair decline in the costs to be spent. It will indicate the nature of the item, its type, size or shape, and value without excluding the full cost of the item. The material providers are bound by their side for the material they supplied.(Zhang, 2016).
For project success, the stage-wise distribution of costs will be set. This reduces the cost of renovations, the start of the construction phase, the stonework, the roofing, and the simple installation of furniture including interior,house design, and electrical installation according to customer preferences. In the case of cost-sharing, capital costs are used to allow cases with extra costs because of market flexibility of goods. Before work begins, the division of labour will be laid out. This will allow the action stage to continue to ensure that not a single move is left or performed incorrectly. Objectives are included in each key steps of the job assessment in this stepwise framework.
An effective medium for implementing a communication management framework is the use of email and fax. Since papers are often corrupted, torn, or lost, all correspondence made with these platforms allow for future reference and data protection.All the actions and measures taken in this process give the owner and stakeholders’ accountability.Saving documents on web pages also helps participants to quickly capture the best way to connect(Liu, 2017).
Acceptance of the project
This involves approving and accepting a project by taking a direct route and ignoring the associated parameters. The approval or acceptance of the project by the construction company was the first step they took in the construction program. For example, clients had high hopes for the construction of the project and supported the plans. The close out of the project depends on client response to the construction and planning provided by the Construction Company.
This happens when the contractor has already acquired all the terms of the contract and all the administrative titles have been completed. Includes patents, royalty and, securityalong withthe property. Adequate security must be provided throughout the contract and subsequently customer satisfaction and compliance with all applicable terms and conditions. Also, the contract should run as per the preparation of the work plan prepared before the execution of the plan.
Document benefit and archiving
This applies to documents for a project that varies from project to project and from contractor to contractor. Also, a Construction Company may have different approaches to the needs of different customers. The total budget of the client leads to a unique approach to each project. Archiving records is important as well. It has been used for years to recognise and open up opportunities to do more in future decision-making where old records are used.
Team performance and appreciation
The client will assess the qualifications of the construction company staff. On the other hand, the construction company will do a good job by tracking the performance of the employees who are hired by them and recognize the team members who do well. Since theappreciation is simply a source of feedback based on individual members and their performance following the services (Liu, 2017),
Team mobilization program
In all successful work, mobilization is needed to motivate the employees of the construction company. Potential customers and their friends and neighbors are sure to sign a high-quality construction contract that the construction organization brings. The pull of power will encourage the Construction Company to bring more profit margins to expectations (Choudhry & Raza, 2015). Additionally, more invitationsforthe construction of better building plans are welcome in the market as the transformation of existing systems leads to faster customer creation.
Choudhry, R. M., & Raza, M. N. K. (2015). Study of merits and demerits of appointing the design consultant as supervision consultant in the construction industry in Pakistan. In CONGRESS PROCEEDINGS (p. 16).
Burr, A. (2016). Delay and disruption in construction contracts. Informa Law from Routledge. Burr, A. (2016). Delay and disruption in construction contracts. Informa Law from Routledge.
Hughes, W., Champion, R., & Murdoch, J. (2015). Construction contracts: law and management. Routledge.
Liu, X. (2017, February). Development and Research of Public Art in the Construction of Xi'an International Metropolis-A case study of city sculpture. In 2017 International Conference on Humanities Science, Management and Education Technology (HSMET 2017). Atlantis Press.
Zhang, H., Liu, C., & Gao, X. (2016, December). Study on the Price Types of Construction Contracts for Construction Works. In 2016 International Conference on Advances in Management, Arts and Humanities Science (AMAHS 2016). Atlantis Press.
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