Introduction to the

Construction engineering
and Management - UNIT-1
Contents
 Need of construction management
 Objectives
 Elements of project management
 Construction in India
 Unique Features of construction project
 Types of construction projects
 Stages in construction
 agencies involved and their methods of execution
 Project Delivery Methods
 Construction Team. Organisation – principles and types.
 Why Project management
 Almost every industry worries about how to manage similar large-scale,
complicated projects effectively Large, often one-time, projects are difficult
challenges to operations managers.
 The stakes are high.
 Millions in cost overruns have been wasted due to poor planning on
projects.
 Unnecessary delays have occurred due to poor scheduling.
 companies have gone bankrupt due to poor controls.
 As project organisations are set up to handle such jobs and are often, disabled
when the project is complete.

 Project management is the art of organizing the components of a project.

 Project management increases the productivity through technological innovations

 The general goal of a construction project seems simple enough—
building a project on time, within budget, with the stated quality
standards, and in a safe environment.

 Looks so simple! Yet, research shows that less than 20 per cent of most
construction projects meet the four requirements mentioned above.

 Construction project management is known for continual problems and

the companies involved have a continual record of poor performance.
Managing a project is quite different from managing a 'steady state'
organization.
 Objectives
 The project should be completed in minimum time period

 Project should use available manpower and local resources as far

as possible

 Project should be completed without delay and minimum

investment cost
Elements of project management

 Planning
 Scheduling
 Controlling
 Unique Features of a
Construction Project
 One-time activity—it must be performed correctly the first time every time

 Complexity—it is multidisciplinary because it involves a set of interrelated tasks to be

done by specialists .

 High cost and time for execution .

 High risk of failure .

 Difficulty in defining quality standards .

 Uniqueness of people relationship .

 Feedback mechanism . Lack of experience of client or owner .

 Untrained workforce
 Construction in India
 Post Independence, a number of notable construction projects have been
undertaken, namely construction of the first nuclear reactor in 1956;
 Construction of Hirakud Darn in 1957
 Bhakra-Nangal Dam in 1970
 Idukki Darn in 1976
 construction of Mumbai Pune Expressway in 2000
 Tehri Dam in 2005
 The construction related to defence is undertaken Military Engineering
Services
 BRO (1963) - undertakes the expansion and maintenance of road networks in
border areas;
 NHAI(1988) - undertakes the development, maintenance and management of
national highways;
 Indian Railways - undertakes the construction and maintenance of rail
network in India.
 Central Water Commission - Irrigation projects
 Construction in India is the second largest industry next to
agriculture, and it provides employment to about 33 million people.
 It constitutes about 5 to 6 per cent of gross domestic product (GDP) and is vital
for the growth of the overall economy.
Classification of construction
projects
Different classification is done based on following factors
 (a) Cost of construction
 (b) Based on Life requirement and Nature of work –
Based on Life requirement - Permanent, Semi-permanent, Temporary
Based on Nature - Original, Repair, Rehabilitation
 (c) Based on the type of structural members and equipment used
Light, Heavy, Industrial
Types of Construction Projects
 Projects may be widely varying from one another in their concepts,
targets and sizes. There are hundreds of different projects of diverse
nature and size. Construction projects may be classified depending
upon the type of construction, as under:
 Buildings. Residential, office, apartment blocks, educational
institutions, marketing complexes, recreation centres, hospitals,
hotels, factories, utility buildings etc.
 Industrial structures., Industrial structures supporting machinery,
equipment, plant and material handling structures.
 Tall structures. Cooling towers, chimney, transmission towers, silos,
overhead tanks etc.
 Hydraulic structures. Dams, canals, barrages etc.
 Power Plants. Structures for hydropower, thermal power, nuclear
power plants.
 Special structures. Structures for off-shore platforms, space
research stations etc.
Cont.
 Highways, bridges, tunnels.
 Airports and runways.
 Railway network.
 Sewerage and water treatment plants.
 Land Development works.
 Marine structures, harbours etc.
 Oil/gas pipe lines and transmission lines.
 Features of Construction Project
Characteristics of Construction Project

 Each project has a definite finish or completion i.e. time bound.

 Each project is comprised of series of intermediate activities consuming resources and time.

 All projects are essentially cost benefit enterprises.

 Each project is unique in itself, which means no two projects are absolutely similar with

reference to their objectives, location, infrastructure and project team.

 Each project has a fixed set of objectives. Once the objectives have been achieved, the

project ceases to exist.

 A project exists for a fixed duration of time.

Cont.
 The project work is normally entrusted to a project manager (head of the project) who

coordinates the work of various persons working on the project.

 The project team is constituted of members belonging to different disciplines.

 A project cycle consists of: project preparation, implementation and operation phases.

 A project is dynamic in nature and is subjected to many changes during its life span.

 Every project has many constraints in terms of availability of resources and completion of

time.

 Every project has large number activities and they need coordination.

 Construction projects generally employ high value and huge resources of men, materials
 Parameters of Construction Projects
 Following are the major parameters for any construction project :

 Size. It denotes the number of tasks to be executed in a project, and each task is measured in terms of quantities of work

involved.

 Complexity. It is a measure of variety in the nature of tasks to be executed. A project is said to be simple where the tasks

are repetitive i.e. similar in nature.

 Cost. It is the estimate of expenditure to be incurred for completion of the project, which the client has agreed to commit.

 Completion time. It indicates the speed with which the project is to be executed.

 Quality. Quality for a task is stated in terms of standard specifications.

 Capacity. The capacity of a project indicates the demand which can be met from the project during its operation after its

completion.
 Objectives of Construction Projects
 The project should be completed in minimum duration, so as to start getting benefits at an earliest.

 Manpower and other resources should be used judiciously in an optimum way.

 Project should be completed with minimum capital in-vestment for getting maximum benefits for maximum

duration

 Build new projects in order to satisfy demand during their operation after completion.

 Addition in the existing project so as to meet additional demands.

 Renovation/modification/alteration/strengthen the existing project in order to increase the life of project or

accommodate new machines or to relocate existing machines to boost production.

 Construction project should meet the constraints like quality, time, cost and environment.
Resources required for the construction project

 Human resources
 Material
 Equipment
 Capital/Funds
Phases of a Construction Project
 A construction project also passes through different phases in its life cycle. The term
'phases; 'stages' and 'steps' are used interchangeably in project management literature and,
accordingly.
 The phases can be defined as the top-level breakdown; of an •entity, and a construction
project is distinctly characterized by a number of phases or stages during its life cycle,
though there may be some overlaps between the characteristics of two phases.
 Considering the definition of construction project as unique, it is really very difficult to
identify some common stages across all the construction projects, since depending on the
type of project, the type of organization and other parameters, the phases as well as the
tasks performed in each of the phases may vary.
 For example, some of the stages in a technical project such as a petroleum refinery
project or a chemical project would be different from that of a building construction
project.
 Researchers and practitioners do not adopt a common nomenclature to distinguish
different phases of a project. Thus, there is no single standard nomenclature available to
describe the different phases of a construction project.
 Different project phases under three broad categories—
Pre-ProjectPhase
Project Phase
Post-Project phase
Pre-Project phase
 Initiation phase
 Project concept phase
 Feasibility phase
 Conceptual
 project strategy
 Estimate
 Approval
Initiation or idea phase The pre-project phase aims to identify all
possible projects based on the examination of needs and the possible
options.
This stage is also sometimes referred to as initiation phase or idea
phase.
A possible example would be a municipal authority concerned with the
growing parking problems near a prominent city milestone. The
municipal authority may explore different options to address the parking
problem.
The options shall be evaluated against the mission and vision of the
municipal authority and the limits to which funding is available with the
municipal agency.
Project concepts
 The initiation phase aims to sort out all the mentioned information to identify
some project concepts.
 As many project concepts as possible are identified, and using some selection
procedure (such as the benefits for the organization that intends to employ
them) in line with the objectives of the organization, several project concepts
are selected.
 The project concept phase of a new construction project is most important, since
decisions taken in this phase tend to have a significant impact on the final cost.
It is also the phase at which the greatest degree of uncertainty about the future
is encountered. The selected project concepts, then, are used as the inputs for
the feasibility phase.
Feasibility
 This phase aims to analytically appraise project concepts in the context of the
organization, taking into consideration factors such as the needs of the
organization, the strategic charter of the organization, and the capabilities and
know-how of the organization. With this information, the decision maker should
be able to decide whether or not to go ahead with the project concept proposed.
The feasibility phase can be broadly characterized into the following:

 Conceptual For the selected project concepts, the preliminary process diagrams and layouts are prepared.
Design basis or design briefs are also formulated. Project strategy The strategy in terms of selection of an in-
house design team or the contractor's design team is deliberated upon. The resources required and their
availability is discussed.

 Further, the number and type of contractors required for the execution of project is also formulated. Besides all
these, the project strategy also contains the overall project schedule, the project scope and the overall project
plan. Estimate A preliminary estimate is prepared with reasonable accuracy by first breaking down the project
into work packages/elements.

 The estimates may be prepared for each of the work packages using the established historical database and the
resources estimated for each of the work packages.

 Approval Approval consists of financial evaluation, identifying details of funding and their timing, capital/
revenue, etc., besides evaluation of different options.
 The feasibility phase has sub-phases such as
 market feasibility analysis.(to confirm the viability of the project concept from a purely
marketing point of view),
 technical feasibility analysis (to demonstrate whether the project is technically feasible and
to estimate the cost of project concept),
 environmental analysis (to ensure that the project does not go against ecological issues and
regulations), and
 financial feasibility analysis (to establish whether the project once materialized would
generate profits for the organization).
 It is only after the first three sub-phases are found to be positive that a financial feasibility
analysis is performed.
 If the feasibility analysis is positive, one can go ahead, but if it is negative, the project can
be abandoned and eliminated from the 'project concept' definition.
 The feasibility phase is terminated when a decision maker decides to transform the project
concept into a project. At this point, in the case of a plant, the capacity is decided, the
locations are chosen, the financing is agreed upon, the overall budget and schedule
determined, and a preliminary organization is established.
 Cont.
 Some of the tasks related to pre-project phase are
summarized below:
 1. Assigning a task force to conduct preliminary studies for the
proposed project
 2. Studying the users requirements
 3. Defining the technical specifications and conditions that determine
the quality of the required work
 4. Studying how to secure funds to finance the project
 5. Estimation of the project cost and duration
 6. Approval of the project cost
 7. Studying and determining the technical specifications of the
materials
 8. Studying the impact of the project on the safety and health of the
community and environment
 9. Establishing criteria for the selection of project location
 10. Advising members of the task force (consultant, engineering,
etc.) on the approved funds for the project Establishment of
milestones for the project for review and approval
 12. Describing the responsibilities and authority of project parties
 13. Pre-establishing a system to prepare for 'change order'
procedures
 14. Establishment of design criteria for structural specifications
 15. Conducting a feasibility study of the proposed project
Project phase

 Basic design phase

 Detail design phase
 Tendering phase
 Execution phase
 Closure phase
Project phase
the project phase also referred as project implementation phase project
realisation phase or project materialization phase. It can be broken down into
five sub phases
 Basic design phase The activities in this phase are carried out by an engineering
organization or an architect. During this phase, the documentation for tendering and
contracting the physical construction or for procuring equipment is prepared. It
involves performing basic design calculation, preparing tender drawings, preparing
design and material specification, etc. The changes, if any, from the initial scope of
work are recorded. Regular design and specification review meeting is one of the
important features of this stage of the project.
 Detailed design phase Detailed design may be carried out in-house or through
contracting. In some cases, such as 'item rate' contract, it may be required to carry
out the detailed design before starting the ten-dering process. However, in some
cases, such as 'design build' contract or lump sum' contract, the tendering process
can start immediately after the completion of basic design and specifications.
 Tendering phase Tenders are issued if it is decided to execute the project through
contracting. The preparation of clear and precise documents is essential to eliminate
any dispute about scope of work at the contract stage. The tender preparation
includes preparing the specifications and agreement conditions, preparing bill of
quantities and estimating the contract value. It also includes issuing of tender
document to the interested applicants, holding meetings, receiving bids and
evaluating them. After the bids are evaluated, recommendations are made for the
successful contractor and approvals sought to place a contract, and finally the
contract is awarded.
 Execution or construction phase Immediately after the contract is awarded,
construction phase begins. In cases where the detailed drawings and designs were not
available as part of the tender document, the contractor proceeds with the preparation
of detailed design and drawings, and follows it up with the construction. In some
 cases, the preparation of detailed design and construction may
proceed simultaneously with milestone-wise. deliverables for both
design and construction. After the construction work has started, the
progress is closely monitored and regular meetings held with the
contractor to assess cost and schedule.
 The variations in cost, quality and schedule are noted and corrective
measures are taken to bring them to the desired level.
 Closure or completion phase In this phase, the major
equipment's are tested and commissioned, and the constructed
facility in totality is handed over to the client for use. Client issues
approval of work and a completion certificate after all the work has
been checked and found to be in order. Some of the typical tasks
performed in the project phase are listed below:
 Design-related tasks
 1. Arranging the documents of the construction contract
 2. Qualifying of design professionals
 3. Performing technical and financial analysis of offers from competing
contractors
 4. Selecting the design team
 5. Negotiating with the qualified. design professionals
 6. Providing the qualified design professionals with the needed information
 7. Monitoring the design progress of the proposed project
 8. Evaluating the design and making the necessary decisions
 9. Updating design documents
 10. Reviewing design documents
 11. Conducting design peer review
 12. Monitoring design quality
 13. Updating drawings and specifications to reflect the requirements of location
or environment
 14. Using technical standards (e.g., Indian standard, American standard, British
standard, etc.) to describe materials quality and construction methods
Cont.
Tendering- and construction-related tasks (Bubshait and Al-Musaid
1992)
 1. Pre-qualifying contractors
 2. Holding a pre-bid conference and providing the necessary information
 3. Negotiating contract price with qualified contractor
 4. Reviewing at frequent intervals documents submitted by the
contractor (e.g., work schedules, manpower qualifications, equipment)
 5. Interpreting and clarifying ambiguities in the contract documents
 6. Taking necessary precautions to prevent the loss of project data
 7. Making necessary decisions against contractor claims during project
implementation
 8. Monitoring and controlling implementation methods, cost, schedule
and contractor productivity
 9. Enforcing quality and safety principles during project implementation
10. Assigning personnel to supervise, monitor and control the
implementation of quality (quality control programme)
Cont.
 11. Establishing quality assurance programme
 12. Enforcing the quality assurance programme
 13. Conducting regular visits to project site
 14. Establishing acceptance criteria
 15. Receiving record (as-built) contract drawings and specifications
Post-Project Phase
The post-project phase is also known as the turnover phase or the start-up
phase. During this phase, the responsibility of the materialized deliverable
is transferred from the engineers, the architects and/or the gen-eral
contractors to the owners. The two general phases under Post-project
phase are shown in Figure 1.3 and are discussed below in brief.
 Cont.
 Utilization phase During this phase, the client or the end user makes use of the finished
project. The performance of the constructed facility is monitored at regular intervals, and
maintenance at regular intervals is performed.
 Close-down phase Once the project has lived its intended life, it is dismantled and
disposed of. The entire cycle explained under different phases is repeated. It is very difficult
to have a clear-cut demarcation among the different phases. This is truer in today's context
when there is a tendency to cut down the project duration, thus requiring considerable
overlapping in different phases of a project. Normally, each of the mentioned phases
requires different skills and, hence, should be carried out by different people with different
skills. Pre-project phase requires creativity, while a project phase requires rigour. Only a few
people are involved in pre-project phases over considerably long time periods, while
hundreds or thousands of people can be involved in project phases over the shortest
possible time periods.
 The phases play a dominant role in several decision-making areas, as given below:
 • Phases of a construction project decide the relative importance to be assigned to various
project performance attributes in its life cycle
 • Phases of a construction project govern the importance of various project success criteria
(de Wit 1988).
 • Change in the phase of a project calls for different skill requirements of a project manager
(Spitz 1982). The objective of a project participant is to achieve success in all the phases to
make the project an overall suc-cess, which can be assumed as the cumulative success in
different phases.
Stages in Construction
 Briefing stage
 Designing stage
 Tendering stage
 Construction stage
 Commissioning stage
 Briefing stage
 Also called report stage where ideas are originated
 Enable client to specify project functions and permissible
cost
 Appoint project steering committee
 Appoint project manager
 Investigation to propose alternate project concepts
 To study various alternatives and identify feasible one.
 To prepare project report
 Designing stage
 This stage is Very important stage for a project.
 Realistic and detail project cost estimate is done.
 Purpose : Project summery and method of construction is
decided
 Determine construction methods & Estimate cost to get
approval from client.
 Preparation of documents which are necessary for inviting
tenders
 Develop project summery for final suitable alternative.
 Carryout Technical investigations.
 To prepare Detail design
 To obtain owner final approval for project summery
 Tendering stage

 In this stage Tenders are invited & Contract is awarded at

the best available terms.
 Purpose : To appoint a contractor
 To obtain tenders from contractor for construction work
 Pre-Qualification of contractors
 Contract documents prepared with extreme care
 Construction stage

 This stage involves execution of construction work.

 Most resource intensive and difficult stage
 Construction planning
 Control of site operations
 Commissioning stage

 Performance of the structure is evaluated

 Purpose : To ensure the construction work has been
completed as specified in the contract documents.
 Reports are prepared for the actual work finally carried out
at the site.
 Changes/Modifications are recorded.
 Activities: To keep various records of actual work
 Inspections and removal of defects.
 To prepare operation and maintenance manuals
 To carry out tests for performance
 Significance of Construction
Management
 A project, in general, is bounded by the limitations of a definite scope of work and a time
of completion, giving certain predetermined benefits to the user on completion of the
project. Each activity of the project is allotted time required for its completion and
resources like manpower, materials, know-how etc. For completing a project
satisfactorily, all the activities are required to be performed systematically in a
predetermined planned way in a time bound schedule with optimised utilisation of
manpower and other resources.
 Most of the modern construction projects are multi-disciplinary and complex in nature;
both from technical and managerial point of view. Such projects require expert
knowledge in various fields and require more attention to the construction process.
Introduction of computers in field of management of construction projects has brought a
qualitative change right from the planning stage to the implementation, control and
review.
 The construction manager by using his foresight and innovative skill with proper
coordination effectively utilises resources for achieving result-oriented plan of
implementation and control for completing the project in time. As we know that, timely
completion of the construction project is very important so as to get social-benefits in
time as well as starting of return on investment, as delay in implementation of the
project adds to the interest burden on the capital investment.
 As effective construction management results in timely completion of the project and it
also contain the cost of construction within the cost estimates. Thus construction
manager must have adequate control over (a) timely completion of the activities, (b)
quality and (c) costs.
 Cont.
 Here management means performing functions of planning,
scheduling, implementing and controlling. These aspects are dis-
cussed in a separate chapter in the book. Management of a
Construction project is a large system having several sub-systems,
mainly contract' management, human resource management,
materials management, finance management, time management for
ensuring project completion within an allocated time, and information
management.
 Agencies of construction
 Agency of construction is one appointed to construct a
total job. And planning and utilization of resources best
possible manner to carryout the job is done by this
agency.
 Agencies are divided into following categories :
 (1) Self
 (2) By employing Labour Directly
 (3) By employing contractor (supplying all materials by
owner)
 (4) By employing contractor (who will arrange materials
and labour)
 (5) By employing contractor (Who will employs sub
contractors )
 (6) Lump sum contract
 Self employment
 Doing work by own
 Owner should have required skills and tools
 Owner should have enough time
 Inclination towards work
 Advantages : quality of work is good , overheads and
payment to contractor may saved
 Disadvantages : Limited to smaller work, Quality may not
be good if owner is not a skilled person, time may prolong
if owner doesn’t spend his/her time, Owner may stuck
with bad quality of material procurement, material cost
will be high because owner doesn’t get trade discount.
By employing Labour directly
 If owner cannot do all works as he/she is unskilled will
employ labours
 Provide all the materials required.
 Generally in government departments works
 When good contractors not available in remote areas.
 Advantages : Profit element on labour and material,
quality of material is good, Time is saved on account of
Preparation of tender document.
 Disadvantages : owner has to appoint a supervisor,
quality control is difficult, owner doesn’t have knowledge
on market price and quality of material, owner has to deal
labour directly, accommodation for labour, Delays due to
shortage of labours on time.
By employing contactor &
supplying materials
 Owner employ contractor who has all responsibility of
labour and their quality of work
 Suitable for small and medium jobs
 Not suitable for complicated projects where quality is
essential.
 Advantages : owner may buy quality of material, No direct
dealing of labour,
 Disadvantages : Owner doesn’t have knowledge on
market price and quality of material, No trade discount on
materials, owner has to bear excess material and
wastage, Quality control is little bit difficult.
By employing contactor(who
arranges Materials also)
 Usual method followed for big projects in India.
 Contractor has responsibility to procure required quality
material and skilled labour to complete the work with in
time ,cost and agreed quality.
 Advantages : Owner can sit back and relax , Good quality
of work,if quality of work is not met standards contactor
has to redo the work by his/her cost. Project can be
completed on time, owner need not to deal with labour
and material procurement, owner may buy quality of
material, No direct dealing of labour,
 Disadvantages :Improper contract document leads to
litigation and delays, Bad quality of work if contractor is
not good, for big projects owner needs to employ
supervisors which leads to an extra cost, owner has to
pay the contractor’s profit.
By employing contactor(who
employs sub contractors)
 Main contractor is appointed and who appoints sub
contractors for specialized works.
 Main contractor is responsible to the owner.
 Subcontract is an agreement between main contractor
and sub contractors
 Advantages :Quality work is good as specialized people
work, progress of work is good because main contractor
doesn’t run around labour and materials , Only main
contractor is responsible to owner for all works.
 Disadvantages : No control on sub-contractors ,work
delayed due to disputes between main and sub
contractors,co-ordination become difficult if sub
contractors are more, suitable for projects where variety
of work has to be done.
 Lump-sum contract
 Fixed amount is quoted for the complete work
 Drawings, specifications, schedule of rates specified
before award of contract.
 Suitable for comparatively small works
CONSTRUCTION TEAM
 The construction team consists of owner, engineers/architects and
contractor. The team is formed to co-operatively plan, design and execute
a particular project. The objective of the team is to execute the owner's
project in the best and most economical manner within the stipulated
completion time. The owner forms the construction team to serve his
interests through the services of both the contractor and engineers. The
functions of the constituents of any construction team depend upon the
scope and nature of the work.
 Owner
 The owner may be an individual, group of individuals, private or public
under-taking. The owner has an ultimate authority over the project. The
owner is the final holder of major decision-making power regarding
managerial, financial and administrative aspects. He approves changes, if
any, in the project scope or schedules. The owner controls the project
resources such as manpower, funds and property. The owner also arranges
for proper maintenance of the work, afte•.the work has been completed.
Cont.
 Engineers and Architects
 This includes structural, mechanical and electrical engineers, architects, quantity
surveyors, specialists such as structural consultants, safety and maintenance planners, soil
investigators etc. The roles of the team members are as follows:

 (1) Architect: The role of the architect is to assess the client's functional requirements,
design for pleasing and aesthetic appearance and to assist the engineers for proper
design.
 (ii) Structural Engineer: The role of the structural engineer is to prepare structural
design of structures and to prepare the working drawings based on the architect's plans.
 (iii) Mechanical Engineer: The role of the Mechanical Engineer is mainly concerned with
design and preparation of working drawings for heating, venti-lating, air conditioning and
other mechanical services associated with the construction project activities during and
after construction.
 (iv) Electrical Engineer: The Electrical Engineer is concerned with the design and
preparation of working drawings for electrical power and distri-bution systems during and
after construction.
 (v) Quantity Surveyors: The role of the quantity surveyors is to: (a) estimate the cost of
work to be done and actually carried out; (b) prepare the bill of quantities and tender
documents before tendering; (c) assess the extra costs due to special features; (d) prepare
the cash-flow statements during construction; (e) prepare the final account on completion
of the project. (vi) Specialists/Consultants*: They carry out soil investigations and
collect information regarding special requirements for items such as health, safety,
workshop equipment etc. They also suggest solutions to specific problems encountered
Cont.
 Contractor The contractor may be an individual undertaking small
contracts or a large construction company undertaking turn-key
projects. Contractors whether small or big need the services of
qualified engineers. Some of the engineers employed by the
contractor deal with office work such as designing, tendering,
scheduling etc. in the head office. Others, known as site engineers,
are concerned with the actual execution of work such as surveying,
levelling, construction, billing etc. In some projects, the contractor
may sublet part of the work to sub-contractors or petty contractors.
This is done because a contractor may not have the required
infrastructure for certain works. The contractor has to execute various
types of works and has to make all necessary arrangements for
labour, machinery, materials, power connection etc. in order to
complete the project within stipulated time and cost.
Organisation-Principles
 An organisation is a group of persons working together to achieve an established goal.
It is the relationship which exists between people taking part in a group activity.
 It defines the responsibilities and authority of individuals in relation to men, materials,
money and machinery which constitute the resources of an organisation.
 An organisation is needed because a manager at any level can effectively manage the
functions of only a limited number of persons working directly under him.
 The setting up of a suitable organisation for various civil engineering works is all the
more necessary because the construction industry is a competitive field of endeavour
which is susceptible to many risks, variable labour conditions and diverse construction
problems.
 In order to be effective, an organisation has to follow certain basic principles given
below:
 (i) Principle of Objectives: The organisational objectives should be clearly defined. The
structure of the organisation should be geared to achieve these objectives at minimum
cost and effort.
 (ii) The Scalar Principle: An organisational structure consists of different levels of
authority arranged in a hierarchical manner. The line of authority should be clearly
defined from the chief executive at the top to the first line supervisor at the bottom.
This is known as scalar principle. The importance of scalar principle lies in the fact that
the understanding of authority relationships within an organisation becomes easier. It
 Cont.
 (iii) Principle of Balance Between Authority and Responsibility: In order
to perform work properly, it is essential that every one knows his duty,
responsibility and authority or powers. Authority means right to act,
decide and command. The delegate will not be able to perform his task
properly unless he is given necessary powers (i.e. authority). So,
whenever a task is assigned to a person, he must be given sufficient
powers to exercise control in order to achieve desired objectives.
Responsibility is the obligation of a subordinate to perform any job
allotted to him by his superiors. A person, who is assigned responsibility
to do a certain job, must be given appropriate authority to achieve the
same. Thus, authority and responsibility go hand in hand and must be
balanced rationally to produce best results. For example, if a civil
engineer in a construction firm is asked to carry out construction of
different structures, and is not given corresponding authority to procure
the various resources, responsibility given to the civil engineer would be
illogical and unbalanced.
 Cont.
 (iv) Principle of Unity of Command: Each person in an organisation mum know
to whom he has to report and from whom he should receive orders. He should
also know the persons both upwards and downwards whom he is to consult.
The principle that each subordinate should report to only one superior is
called the 'Unity of Command'. This not only avoids confusion but also helps in
maintaining a definite line of command. In order to avoid indiscipline, delay,
disorder and undermining of authority, a subordinate should receive orders
from only one superior and not from a number of superiors.
 v) Principle of Span of Control: According to this principle, there is a limit to
the number of subordinates an executive can effectively supervise. There are
many factors on which the span of control depends, such as the type of work,
whether routine or repetitive, level in the organisation, type of problems
encountered and abilities of the persons involved. The optimum span of
control varies from person to person and job to job. Sometimes the number
six is taken as the effective span of control.
 (vi) Principle of Departmentation: Departmentation means the division of an
organisation into several distinct departments or sections. This helps in
increasing the efficiency and facilitates the execution of work. In order to
obtain optimum results, the functions and scope of each department must be
dearly defined.
 (vii) Principle of Specialisation: According to this principle, activities oi the
organisation should be grouped as per the functions and assigned to
individuals according to their specialisation.
 (viii) Principle of Communication: The number of supervisory levels in .a:
organisation must be kept as small as possible. This helps in shortening the of
communication for passing on information, instructions and suggestion, from
the chief executive level to the first line supervisor. The temptation to go too
far in either direction (i.e. horizontal and vertical) means increased lines of
communication which may result in lower overall efficiency and profit.
 (ix) Principle of Flexibility and Stability: Flexibility and stability in an
organisation are closely inter-related. On the one hand, an organisation should
be flexible enough to assess the changes which often become necessary
because of internal and external situations. While on the other hand, the
organisation must be stable enough to withstand any organisational change
which becomes necessary for the accomplishment of its objectives.
 (x) Principle of Motivation and professional Growth: The
organisational structure should be such that it provides enough
opportunities to its personnel for their professional growth and
upward or lateral mobility. Job roles should be such that each member
of an organisation achieves professional satisfaction and is motivated
towards loyalty for the organisation.
 (xi) Principle of Continuity: The organisational structure should be
dynamic so that it not only provides for the activities necessary to
achieve its objectives but also for the continuation of such activities
in the future. This maintains a link between the past and the future.
 COMMUNICATION, LEADERSHIP AND HUMAN
RELATIONS (Beyond Syllabus)

 (i) Communication: Communication means sharing of ideas in a

condition of mutual understanding. The message conveyed by the
initiator may be verbal, written or visual and the receiver may listen,
see or examine and react in other ways.
 In the absence of proper communication between the various groups
and within group members working on a construction site, the desired
progress of work would not take place. In some cases, the
construction work may not even start due to a communication gap
between the planners and implementers. To safeguard against this,
efforts should be made to use better communication styles and
techniques to promote a congenial atmosphere at the construction
site.
Cont.
 (ii) Leadership: Leadership is needed for every project or organisation
at different levels for various reasons given below:
 To help in defining the mission of the group;
 To create an environment in which group members become com-
mitted to the objectives of the group;
 To serve as an interpreter of messages and behaviour of other groups
and individuals who may have some influence on the group;
 To co-ordinate the activities of group members to ensure compatible
and consistent efforts towards the organisational goal achievement;
 To provide needed resources for the group. Thus, heads of different
groups working on the project should provide appropriate leadership
to achieve the established Objectives.
 (iii) Human Relations: The term human relations applies to all inter.
actions, good and bad, among people. The behaviour of people at
work and how various elements of the workplace affect the people
are important to the study of human relations in an organisation or
project. Someone may be irregular at work due to health problems
arising out of adverse site conditions, while another might be
inefficient because of family problems. Human behaviour in the work
environment includes the interaction between superiors and
subordinates, the interaction amongst peers, and the way, in Which
individuals interact with each other in formal and non-formal groups.
Human behaviour in the work environment covers more than just the
activities involved with the actual work itself.
TYPES OF ORGANISATIONS

 The basic structure of an organisation depends upon its size, the

nature of its business activities and the complexity of the problems
faced by it.
 Depending upon how responsibility and authority in any enterprise
can be distributed, the organisational structure can be classified into
three types:
 Line Organisation
 Line and Staff Organisation
 Functional Organisation
Cont.
 Line Organisation It is one of the simplest forms of organisation
and is commonly adopted in civil engineering projects. Its significant
feature, as the name implies, is that there is a clear line of
responsibility and authority right through the management structure.
Line organisation is also called military organisation, scalar
organisation or vertical organisation. A direct relationship of authority
and responsibility is established between the superior and the
subordinate. This type of organisational structure is followed in most
government departments and autonomous engineering organisations
Cont.
 Merits of line organisation
 (i) It is simple and easy to understand.
 (ii) It permits quick decisions.
 (iii) In this type of organisation, each individual is responsible to a
single person and there is no scope for the shifting of responsibility.
 (iv) It promotes discipline among the employees.
 (v) Faults can be easily and quickly detected due to fixed
responsibilities of various individuals.
 Demerits of line organisation
 The departmental heads are over-burdened as all decisions have to be
taken by them. Due to this, personnel are unable to innovate. A delay
in decision-making by top management may bring the system to a
standstill and adversely affect the efficiency of the organisation. There
is a general lack of communication from lower levels upwards. While
there is good communication from top to bottom, the top management
is handicapped due to lack of feedback from lower levels.
Concentration of authority may lead to certain undesirable practices
such as partiality or favouritism.
Cont.
 Scope This type of organisation cannot be successful in a system which
depends upon the ingenuity of its workers. It can be efficient in the
following situations; (i) Where the work is of routine nature;
 (ii) Where subordinate and operational staff is limited
 (iii) In continuous process industries such as refining, spinning,
weaving, sugar manufacture etc.
Cont.
 Line and Staff Organisation
 Line organisations are unsuitable for large and complex projects,
where the key men need to be assisted by specialists in different
fields. The individuals who constitute the staff in an organisation are
experts, who have no line authority but whose function is largely
advisory. This type of organisation comes into existence because line
authority cannot assume direct responsibilities for all functions such
as research, design, planning, scheduling and recording of
performance etc. All these activities are performed by staff, while the
line authority maintains discipline and stability in an organisation.
The authority by which the staff performs its advisory functions are
delegated by the `Line' and their advice is generally accepted
keeping in view their experience and expertise (Fig. 5.2).
 Cont.
 Merits of Line and Staff Organisation
 (1) Functional expertise and experience is available from staff personnel. (ii) It is
based upon planned specialisation. (iii) Specialised work is done by staff
personnel and line personnel can devote their time to achieve sectional targets.
(iv) It provides more job opportunities. (v) Due to staff specialisation, there is
more efficient utilization of human and physical resources. (vi) Quality of product
is better,
 Demerits of Line and Staff Organisation
 (i) The staff may be ineffective due to lack of authority to enforce their decisions.
 (ii) As duties and responsibilities are not clearly defined, there is bound to be
some confusion in the relationship of the line and staff personnel. (iii) Line
members may sometimes resent the viewpoint of staff mem-bers and vice versa.
This may lead to friction and misunderstanding between line and staff personnel.
(iv) The overhead cost increases because of high salaries of staff personnel.
 Scope This type of organisation is preferred for medium and large scale
industries/construction companies depending upon their internal structure,
production activities and span of business area.
Functional Organisation
 The basis of a functional organisation is specialisation. In such an
organisation, work is carried out on a functional basis and each function
is carried out by a specialist. According to Taylor, the ideal situation in
such an organisation would be when each person performs a specified
function only. This removes the staff personnel from his assisting
capacity and gives him authority and responsibility for supervision and
administration.
 The idea behind this type of organisation is to divide the work in such a
manner that each person has to perform a minimum number of
functions and is fully responsible for those aspects of work. All similar
and related work is grouped together under one person. In order to
perform his function effectively, a person has to report to several
superiors for different phases or aspects of the work. Thus a
subordinate anywhere in the organisation will be commanded directly
by a number of superiors, each with authority in his own field (Fig. 5.3).
 Merits:
 Division of labour is done on the basis of functional speciaisation
 The functional efficiency of individuals increases due to a limited number of
specialised activities
 Manual work is separated from mental work
 Quality of work is enhanced due to specialisation
 Demerits :
 Each person has to report to a number of superiors which weakens
discipline
 This type of organisation is it variance with the principle of unity of common
 There is no clear cut line of authority and this leads to confusion among
personnel working at lower levels
 It is difficult to pinpoint responsibility which may adversely affect the
morale of the organisation Coordination is more difficult
 Overhead costs are increased due to a number of specialists
 Scope
 such type of organisation is not commonly found in practise in its pure form
it is suitable for large research and manufacturing concerns
Project Delivery methods

 Project Delivery is a comprehensive process including planning,

design and construction required to execute and complete a building
facility or other type of project.
 Choosing a project delivery method is one of the fundamental
decisions owners make while developing their acquisition strategy.
 A project delivery method is a system used by an agency or owner
for organizing and financing design, construction, operations, and
maintenance services for a structure or facility by entering into legal
agreements with one or more entities or parties.
 BOT

 Build–operate–transfer (BOT) or build–own–operate–

transfer (BOOT) is a form of project delivery method, usually for
large-scale infrastructure projects, wherein a private entity receives a
concession from the public sector (or the private sector on rare
occasions) to finance, design, construct, own, and operate a facility
stated in the concession contract. This enables the project proponent
to recover its investment, operating and maintenance expenses in
the project.
 BOT is usually a model used in public–private partnerships. Due to
the long-term nature of the arrangement, the fees are usually raised
during the concession period. The rate of increase is often tied to a
combination of internal and external variables, allowing the
proponent to reach a satisfactory internal rate of return for its
investment.
 BOT finds extensive application in infrastructure projects and in
public–private partnership. In the BOT framework a third party, for example the
public administration, delegates to a private sector entity to design and build
infrastructure and to operate and maintain these facilities for a certain period.
During this period the private party has the responsibility to raise the finance for
the project and is entitled to retain all revenues generated by the project and is the
owner of the regarded facilities. The facility will be then transferred to the public
administration at the end of the concession agreement, without any remuneration
of the private entity involved. Some or even all of the following different parties
could be involved in any BOT project:
 The host government: Normally, the government is the initiator of the infrastructure
project and decides if the BOT model is appropriate to meet its needs. In addition,
the political and economic circumstances are main factors for this decision. The
government provides normally support for the project in some form (provision of
the land/ changed laws).
 The concessionaire: The project sponsors who act as concessionaire create a special
purpose entity which is capitalised through their financial contributions.
 Lending banks: Most BOT projects are funded to a big extent by commercial debt.
The bank will be expected to finance the project on "non-recourse" basis meaning
that it has recourse to only the special purpose entity and all its assets for the
repayment of the debt.
 Other lenders: The special purpose entity might have other lenders such as national
or regional development banks.
 Parties to the project contracts: Because the special purpose entity
has only limited workforce, it will subcontract a third party to
perform its obligations under the concession agreement. Additionally,
it has to assure that it has adequate supply contracts in place for the
supply of raw materials and other resources necessary for the project.
 BOT model
 A BOT project is typically used to develop a discrete asset rather than a whole
network and is generally entirely new or greenfield in nature (although
refurbishment may be involved). In a BOT project the project company or operator
generally obtains its revenues through a fee charged to the utility/ government
rather than tariffs charged to consumers. A number of projects are called
concessions, such as toll road projects, which are new build and have a number of
similarities to BOTs.
 In general, a project is financially viable for the private entity if the revenues
generated by the project cover its cost and provide sufficient return on investment.
On the other hand, the viability of the project for the host government depends on
its efficiency in comparison with the economics of financing the project with public
funds. Even if the host government could borrow money on better conditions than
a private company could, other factors could offset this particular advantage. For
example, the expertise and efficiency that the private entity is expected to bring
as well as the risk transfer. Therefore, the private entity bears a substantial part of
the risk. These are some types of the most common risks involved:
 Political risk: especially in the developing countries because of the possibility of
dramatic overnight political change.
 Technical risk: construction difficulties, for example unforeseen soil conditions,
breakdown of equipment
 Financing risk: foreign exchange rate risk and interest rate fluctuation,
 Build-Operate-Transfer (BOT)
 Build-Operate-Transfer represents a complete integration of the project
delivery: the same contract governs the design, construction, operations,
maintenance, and financing of the project. After some concessionary
period, the facility is transferred back to the owner.
 Build–own–operate–transfer (BOOT)
 A BOOT structure differs from BOT in that the private entity owns the
works. During the concession period, the private company owns and
operates the facility with the prime goal to recover the costs of
investment and maintenance while trying to achieve a higher margin on
the project. BOOT has been used in projects like highways, roads mass
transit, railway transport and power generation.
 Build–own–operate (BOO)
 In a BOO project ownership of the project remains usually with the project
company, such as a mobile phone network. Therefore, the private
company gets the benefits of any residual value of the project. This
framework is used when the physical life of the project coincides with the
concession period. A BOO scheme involves large amounts of finance and
long payback period. Some examples of BOO projects come from the
water treatment plants.