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Overview of the Construction Industry, Chapter 2

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Overview of the Construction Industry, Chapter 2 Overview of Construction Industry The construction industry is the second largest industry in the United States ... – PowerPoint PPT presentation

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Title: Overview of the Construction Industry, Chapter 2


1
Overview of the Construction Industry, Chapter 2
2
Overview of Construction Industry
  • The construction industry is the second largest
    industry in the United States, behind health
    services, and the largest product producing
    industry.

3
Overview of Construction Industry
4
Overview of Construction Industry
5
Overview of Construction Industry
6
Overview of Construction Industry
  • It employs more that 6 million people.

7
Overview of Construction Industry
  • The industry is broken down by type of
    construction
  • Residential
  • Commercial building
  • Heavy civil highway
  • Industrial

8
Overview of Construction Industry
  • The industry is broken down by type of
    construction
  • Residential

9
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10
Overview of Construction Industry
  • The industry is broken down by type of
    construction
  • Heavy civil highway

11
Overview of Construction Industry
  • The industry is broken down by type of
    construction

  • Industrial

12
Overview of Construction Industry
  • It is further broken down by public works
    (government) or private construction.

13
Build Your Future
  • Construction is the business of building things
  • The most important thing you will ever build is
    your own reputation
  • Building your reputation personal ethics

14
Ethics
  • Best working definition of ethics is
  • Doing the right thing
  • Bid shoppinggtgt bid depositories
  • Under the table payments (bribery)
  • How will you know if it is right or wrong?
  • You will know!!!
  • Could you consume the gift in one day?

15
Constructor Code of Conduct
  • I. The Constructor shall maintain full regard to
    the public interest in fulfilling his or her
    professional responsibilities to the construction
    industry.

16
Constructor Code of Conduct
  • II. A Constructor shall not engage in any
    deceptive practice, or in any practice that
    creates an unfair advantage for the Constructor
    or another.

17
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18
Constructor Code of Conduct
  • V. A Constructor shall not divulge to any person,
    firm, or company, information of a confidential
    nature acquired during the course of professional
    activities.
  • VI. A Constructor shall carry out
    responsibilities in accordance with current
    professional practice.

19
Constructor Code of Conduct
  • VII. A Constructor shall keep informed of new
    concepts and developments in the construction
    process relative to his or her responsibilities.
  • American Institute Of Constructors
  • http//www.aicnet.org/

20
The Construction Industry
  • Engineers and architects who complete studies and
    designs for clients are providing a service.

21
The Construction Industry
  • Construction is a goods producing industry
  • Different than manufacturing
  • Custom designed
  • One-of-a-kind product (structure/building/bridge)
  • Easy-in and easy-out (few barriers)

22
Organization of the Industry
  • Residential
  • Commercial
  • Highway heavy civil
  • Industrial

23
Organization of the Industry
  • Owners
  • General Contractors
  • Construction Managers
  • Subcontractors or Specialty Contractors

24
Organization of the Industry
  • Designers
  • Trades
  • Insurance companies
  • Suppliers

25
Organization of the Industry
  • Public Works
  • Federal
  • State
  • Local government

Usually awarded to the lowest responsible,
responsive bidder
26
Organization of the Industry
  • Private Work
  • Golden rule

27
Organization of the Construction Business
  • Vertical Construction

Design by architects
28
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29
Project Delivery Systems
  • Design-bid-build. (low bid)
  • Negotiated contracts
  • Design-build
  • Job Order Contracts
  • Construction Management (at Risk)
  • Best Value Procurement
  • Incentive Contracts

30
Incentive Contracts
  • Bonus for early completion (most common)
  • Penalty for late completion - required by law to
    also offer a bonus for early completion
  • Liquidated damages are not the same thing!

31
Incentive Contracts
  • A B contracts
  • Contractors bid an amount in dollars, the A
    component of the bid, plus a number of days, the
    B component

32
A B Contracts
  • Example w/ 10,000 per day for B
  • Bidder 1 500,000 and 200 days 2,500,000
  • Bidder 2 540,000 and 180 days 2,340,000
  • Bidder 2 is the low bidder
  • in spite of a higher bid!

33
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34
Construction Company Jobs
  • College graduates who begin their careers by
    working for a construction contractor normally
    start as a project engineer
  • Estimators
  • Schedulers
  • Project managers

35
Assignment
Chp. 2 Review Questions due next class 2.2, 2.3,
2.5 and for your state describe the construction
industry size (), type of contractors, number
of employees, etc. Read the ENR cover story of
Dec. 2, 2002, Leaders Come in all Shapes and
Sizes But the Great Ones Focus on People. Write
a one page paper on your personal leadership
philosophy.
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