THE CONSTUCTION INDUSTRY 1.1.

THE CONSTRUCTION PROJECT Humans are compulsive builders who have demonstrated troughout the ages remarkab le and continually improving talent for construction. As knowledge and experienc e have been gained,hu,anity s ability to build structures of incresing size complexi ty has increased enormosly. In this modern world, everyday life is maintenedand enhanced by an impressive ar ray of construction. Buildings,tu nnel,highway,pipeline,doms,docks,canals,bridge s,airfields. As long as there are people on earth,structures will be build to serve them. Construction projects are complex and consuming undertakings. To some degree,aech contruction project is unique,and no two are ever quite alik e. In its specifics,each structure is tailored to suit its inveronment,and desig ned to reflect personali tastes and preferences. The construction process is subject to influence of highly variable and often un predictable factos. 1.2 ECONOMIC IMPORTANCE For the past several years,construstion has been the largest single production i ndustry of the american economy,that the construction industry has great influen ce on the state of this nation s economic health. During the priods of recession,construction is depressed and the building of pu blicly financed project is often one of the frist givernmental action taken to s timulate the general economic. A high level of condrtuction activity and priods of national prosperity are simu ltaneous phenomena,each is a natural result of the other. The effect of the construction industry on the general conomic is well illustrat ed by some figures recenclyreported by Associated General Constructin of america . 1.3 THE OWNER Private owner may be individuals,partnerships,corporations,or various combinatio ns thereof.most private owner have structures built for their own use.own constr uction work actively and closely with the design and constuction of their proje cts.such active owner participation is normally limited to large and complex pro ject etc.

1.4 CONSTRUCTION CATEGORIES The field of construction is as diversivied as the uses and forms of the many types of structure it produces. However, contruction is commonly divided into f our main catagoreis.specialization is usual and necessery because of radically d ifferant equipment requirement,consrtuction methode, tr ade and supervisory skil ls,contrct provisions,and financial arragment involved with differens constructi on categories. Four that is : residential construction,building construction,engineering constr uction,industrial constuction 1.5 PROJECT FUNDING For a construction facility of any significance,the owner must normally acquire the neccesary funding from some external source.where construction fgunding is obtained by commercial loans,the owner must typically arrange. Two kind of finan cing : (1) short term to pay construction cost and(2) long term mortgage. The sh ort term financing involves a construction. A construction usualy extends only o

ver the construction period and is granted by a lending institution with the exp ectation that is will be repaid at the completion of construction by some other loan such as the mortgage financing. 1.6 THE CONTRACT SYSTEM The owner of a proposed construction project has many different opsions availabl e as to how is to be accomplished.in the usual mode of accomplishing constructi on work the prime contractor enters into a contranct with the owner. The contrac tor is obligated to perform the work in full accordance with the contract docume nt.and the owner is required to pay to contractor as agreed. Experience shows th at the owner can often reduce their construction cost by giving more thought to the type of contract that best suits their requitment. 1.7 THE CONTRACT SYSTEM The owner of proposed construction project has many different opsions available as to how the work is to be accomplished. The means by which the prime contracto r is selected, the form of contract used.and of scope of duties thereby assumed by the contrctor can be highly variabledepending on the preferences and requirem ent of the owner. 1.8 COMPETITIVE BIDDING The competitive bidding of public construction project is normally required by l aw and is standart prosedure by law and is standard prosses for public agency. The construction firm that obtaint its work by competitive bidding occupies an e ssential position in the construction industry. Competitive bidding can also be used where the succesfull contruction is deffere nt on a bassis other than the estimated cost of the construction. 1.9 THE NEGOTIATED CONTRUCT Extensive use of negotiated contrats has been tradisional in some areasof the co nstraction industry such as residential and industry construction. However, rece nt years have seen incresing of negosiated contract across the board in the priv ate sector. 1.10 CONTRUCTION MANAGEMENT The owner contructs with an architet engineer for design services and with a co ntruction manager (comonly designated as GM) for specified profesional services. 1.11 CONSRUCTION MANAGEMENT There is no universally accepted definition for construction management and, unf or nutely, it is a term that means different things to different people, in what might be considered the tyipical arrangement, the owner contracts with an archi tect-engineer for design services and with a consturction manager (commonly desi gnated as CM) for specified professional services. 1.12 CURRENT STATUS OF CONSTRUCTION MANAGEMENT At the present time, construction management is axtensively utilized in this cou ntry by both, private and public owner, however, the CM approach is still evolvi ng and confusion to exits as to what the exact defenition of CM. 1.13 DESIGN-MANAGE Design-manage is a term sometimes used to refer to a more comprehensive single-source construction service to the owner than the CM process discussed in the previous section. 1.14 THE BUILDER-VENDOR There are many instances in which owner choose to act as their own general const ractors for the purpose of constructing projects for subsequent sale or lease to other parties. Single-family dwellings, apartement houses, office buildings, sh opping centers, and warehousing facilities are common.

1.15 CONSTRUCTION BY FORCE ACCOUNT Force account, also know as doing work by day labor, is another instance where t he owner acts as the prime constractor, axcept in this case the project is const ructed for the use of he owner and not for sale or lease.