Join Jim Rogers for an in-depth discussion in this video How is the industry organized, part of Construction Management Foundations.
- As we step through the processes in the previous videos, we also begin to break down the structure of the industry. We discussed the architect and the fact that the architect will traditionally have a contract directly with the owner for their design services package. Now, that architect might also have an additional contract with the owner to act as the owner's representative during the construction process. Under this type of arrangement, the architect might provide services that could include conducting progress meetings, overseeing quality, approving changes, and just generally being the point of contact for the owner during construction.
Now, that scenario that I described so far is the typical method used on a vertical construction project. If this were a true horizontal only construction project, the roles that I described as being played by the architect might actually be played by a civil engineer since there might be little, if any, architectural design in that type of project. Now, in addition to the architect, the owner is also going to need to hire a general contractor who will be the single point of contact for that owner to the building team in the field.
The general contractor will be responsible for setting an overall price for construction that they and the owner will agree on and put into a written contract. They'll manage the overall schedule and the progress of the building activities, and they'll hire the personnel, the equipment, and the subcontractors as needed to perform the work outlined in their agreement with the owner to result in a finished facility. Now, there are general contractors who self perform some types of work in the field by directly employing skilled tradespeople, and there are others who only perform management and oversight activities.
I'll give you an example. The company I described earlier that I ran in California was a general contractor that was hired primarily by government agencies to build roads. We produced the schedule and managed the overall project, but we also directly employed individuals like skilled equipment operators to grade and pave the roads, and labor to install underground utilities. Now, we had competitors who did the same, and we had other competitors whose employees only performed management and oversight functions.
They subcontracted all of the actual work to be performed. Now, this is common in construction, and as a project's scope increases in size and complexity, I think it'd be very rare to find a general contractor who self performed all of the work on a project. In fact, most general contractors will really try to specialize in being general contractors or construction managers, and they'll hire those subcontractors to perform a large portion of that physical building activity in the field.
Now, this begins to relate back to what we talked about at the beginning of this course when I discussed how construction is different from other industries. As a general contractor, remember, I typically have to move from one geographic location to another as I get hired to build different projects. As this geography becomes more diverse, it becomes logistically difficult for me to move people and equipment from project to project. At some point, it just becomes more efficient for me to hire a subcontractor who is physically located in each geographic location.
Likewise, the diversity and the scope of work that might be included in any one construction project can really drive the need for more and more specialty subcontractors. Now, you'll begin to see that all of these conditions and all of these changing conditions can really start to pose a challenge to the general contractor, so think about it. Everything I build is going to be built at a new site or location, and I'm going to assemble a team that's probably different than the team I assembled to build the last project.
Even if I hire the same subcontractors, I don't control their labor force, so I may or may not get the same people that were on my last project. All of this is also precisely why most projects are built under this arrangement where an owner hires one design firm who assembles the design subtrades that they need, and one general contractor who assembles the crafts and the subcontractors that they need to build the project. An owner, just generally, is not going to have the skills, the knowledge, or the personnel to directly hire and oversee a team of individual trade contractors to build their building.
They need that general contractor and their expertise to assemble and manage that build team. Now, the subcontractors that are hired by the general contractor, again, they'll likely specialize in one type of work, and they'll directly employ the labor and the skilled craftworkers that they need to perform that work. Generally, it's these trade contractors that employ the people that we see in the field and at the actual workface. Now, these trade contractors, and we also call them subcontractors or specialty contractors, they'll still have a need for construction managers that understand and can manage the overall process, but they'll tend to have a need for construction management professionals who are well versed in whatever their particular specialty is.
Let me give you an example. I think I'm a pretty good general construction manager. I understand the overall process, and what's needed from beginning to end to get a new mid-rise office building constructed. I'm also a concrete expert, and I can easily go to work for a concrete contractor and be successful in a construction manager's role in that type of specialty construction firm. I would not, however, do well at a heating, ventilation, and air conditioning contractor. I don't know enough about that type of specialty trade, and I would require quite a bit of training and learning before I can effectively manage their work.
Now, the other big difference between being a construction manager for a general contractor versus a trade contractor is that I'm going to spend more time directly managing people at the workface when I work for a trade contractor, because it'd be my skilled labor force that's performing the physical work in the field, as opposed to playing the role of construction manager at a general contractor where I'm going to spend more time dealing with and managing other companies as a whole, our subcontractors, rather than individuals.
Now, whether it's a general contractor or a subcontractor, remember, that as the size of the company increases, so can the responsibilities and knowledge that's required. We looked previously at the different roles that can be played by a construction manager, and depending on the size of a company, a construction manager might wear many of those hats during the course of a day, while some larger companies may have all of those roles split up and well defined and divided. In this chapter, I think we've really covered the overall construction process.
We plotted out the common flow of events that needs to be present on every project, to some degree, in order to ensure its success. We also looked at the roles traditionally played by the construction manager throughout these processes. As we continue, we'll take a look at how some of these processes and roles are changing based on things like advances in technology and the adoption of some new ways of thinking.
Whether you're a construction industry veteran looking to switch roles or a brand new construction manager trying to get your bearings, this course provides you with meaningful insights into this vital, evolving industry and your role in it. Instructor Jim Rogers explains how integrated project delivery methods work, how technology is shaking up old processes, and how lean productivity methods are being used at construction sites. Throughout the course, you'll get industry knowledge from Jim, as well as other experienced construction professionals.
- Modern construction industry overview
- The construction team
- Reviewing the many roles of the construction manager
- A day in the life of a construction manager
- Understanding how the industry is organized
- Working with alternative project delivery methods
- Understanding the role of technology in construction