Construction Economics and Management

6.Decide if these statements are true or false.

1)The project life cycle consists of seven steps.

2)One should assess the feasibility of various project options in the construction planning stage.

3)The feasibility assessment of a project follows the preliminary design.

4)The timing for the project completion is provided by the detailed engineering design.

5)The construction facility is accepted by the owner after the start-up period.

7.Complete these sentences with the correct form of the verbs in the box.

assess consider implement dispose of select propose deliver erect

1)Our firm ____________ construction projects from inception to completion.

2)Construction materials ____________ to the construction site.

3)In the feasibility study stage one should ____________ the best possible alternative for the project.

4)The construction process is very complex because we have to ___________

a lot of issues.

5)Before the project starts one should carefully study the market needs and

___________ costs.

6)Designers usually ___________ various options for project implementation.

7)Our task is to ____________ the designed construction facility on site.

8)After the building has fulfilled its useful life it should ____________.

8.Look through the text again and find the words to match these definitions.

9. Complete the text with the expressions in the box.

The success of a construction project totally depends on careful planning

_____________ the technological and economic feasibility. The project should

_____________ of the construction market ______________. Otherwise, the facility that is _____________ won’t bring any benefits to the owner.

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10.Make the sentences passive.

1)Someone studies the market demands and needs.

E.g.: The market demands and needs are studied.

2)Someone proposes various project options.

3)Someone develops a feasibility study and selects the best alternative.

4)Someone assesses the costs and examines the financing schemes.

5)Someone develops a detailed construction plan.

6)Someone delivers construction materials and erects the facility on site.

7)Someone organizes the start-up of the facility and turns it over to the owner.

8)Someone disposes of the facility after it has lived out its useful life.

11.Use Figure 2 (page 10) to describe the stages of the project life cycle. Start your sentences with the following words:

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5. Read the text and answer the questions.

Cost estimating is one of the most important steps in project management. A cost estimate establishes the baseline of the project cost at different stages of development of the project. A cost estimate at a given stage of project development represents a prediction provided by the cost engineer or estimator on the basis of available data.

The costs of a constructed facility include both the initial capital cost and the subsequent operation and maintenance costs. Each of these major cost categories consists of a number of cost components.

The capital cost for a construction project includes the expenses related to the initial erection of the facility:

land acquisition,

planning and feasibility studies,

architectural and engineering design,

construction (including materials, equipment and labour),

supervision of construction,

construction financing,

insurance and taxes during construction.

The operation and maintenance cost in subsequent years over the project life cycle includes the following expenses:

land rent (if applicable),

operating staff,

labour and material for maintenance and repairs,

periodic renovations,

insurance and taxes,

financing costs,

utilities.

In most construction budgets, there is an allowance for contingencies or unexpected costs occurring during construction. So, a construction firm makes a forecast in five different areas:

changes in project development,

schedule adjustments,

general administration changes (such as wage rates),

differing site conditions from those expected, and

third party requirements imposed during construction, such as new permits.

(Adapted from: Ch. Hendrickson. Project Management for Construction. 2nd ed. Carnegie Mellon University, 2000. http://pmbook.ce.cmu.edu/)

1)What is a cost estimate and why is it an essential step in project management?

2)What are the three types of costs involved in the construction process?

3)Why does a cost estimator have to provide an allowance for contingencies?

4)Look through the lists of construction costs again. Which of them do you think are the highest/the lowest?

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6. Complete the table.

7. Complete these sentences with the correct form of the verbs in the box.

forecast establish occur adjust require maintain supervise

1)The utility costs ___________ during the operation and maintenance period.

2)A cost engineer usually ____________ both initial and subsequent costs.

3)The construction process needs to be ____________.

4)Our task is to ___________ the construction schedule because of new site conditions.

5)Cost estimating ____________ high qualifications.

6)When the construction process is finished, the owner starts to operate and

____________ the facility.

7)To start developing a project one has to ____________ its budget.

8.Translate into English.

9.Use the words and collocations from exercise 8 to translate the sentences.

1)Разработка строительной сметы – одна из важнейших составляющих управления проектом.

2)Они должны скорректировать график строительных работ.

3)Изменение условий строительной площадки требует непредвиденных расходов.

4)Задача нашей компании – осуществлять надзор за ходом строительных работ.

10.Imagine you are estimating the costs for building a country house. List the things you need to consider in your estimate.

Dimensions – First, we need to know the exact dimensions of the house. Site conditions – We need to check if the site is flat or on a hill.

………………………………………

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2.2Stages of Design

1.What place does the design process take in the project life cycle? Study Figure 2 (page 10) again and put the following design stages in the logical order:

2. Translate the following collocations into Russian.

Engineering design; design requirements; feasibility assessment; preliminary design; detailed design; market demands; system configuration; design concept; project implementation; working drawing; solid modeling.

3. Study and translate the nouns.

a) Read the definitions of the nouns given below

b) Match the nouns and their Russian equivalents.

4. Read the text and study the general stages of design.

The engineering design is a multi-step process including the research, conceptualization, feasibility assessment, establishing design requirements, preliminary design, and detailed design, preceding the final implementation of the project.

5.Complete the sentences.

1)The last stage of the design process, which precedes the final implementation of the project, is _______________.

2)At the research and conceptualization stage the engineer should consider

_________________.

3)One should assess the project feasibility in order to __________________.

4)The whole engineering design process is controlled by _________________.

5)The main purpose of the preliminary design is to __________________.

6)At the detailed design stage the facility is described by means of

_______________.

6.Answer the questions.

1)Why does any project start with research?

2)What should be developed at the stage of preliminary design?

3 bridges the gap between – заполняет пробел между.

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3)When are the general design requirements usually established?

4)Which stage of the design process is mostly associated with cost estimation?

5)In what way are the preliminary and detailed design stages related to each other?

7.Match the words on the left with the words on the right to make collocations from the text.

8. Find the synonyms of these words in the text.

9.Translate the sentences into English.

1)Процесс проектирования включает в себя такие этапы, как формирование концепции, технико-экономическое обоснование, разработка проектной и рабочей документации.

2)Технико-экономическая оценка проекта связана с определением затрат.

3)Для того чтобы успешно выполнить проектирование, необходимо строго соблюдать проектные требования.

4)На этапе разработки проектной документации инженеры определяют общую конфигурацию проекта и разрабатывают принципиальные схемы объекта строительства.

5)При разработке рабочей документации некоторые параметры проекта могут быть изменены или оптимизированы.

10.Describe the design process in detail. What stages does it consist of? What is the purpose of each stage?

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2.3Feasibility Study

1.Read the abstract. What is the purpose of a feasibility study? At what stage of the design process does it have to be developed?

…Instead of just diving into a project and hoping for the best, a feasibility study allows project managers to predict the possible negative and positive outcomes of a project before investing too much time and money.

(Adapted from: http://www.investopedia.com/terms/f/feasibility-study.asp)

2. Fill in the gaps and translate the words.

3. Build up word collocations and match them with the Russian equivalent.

4. Read the text about feasibility studies.

Feasibility studies are preliminary studies undertaken in the very early stage of a project. They tend to be carried out when a project is large or complex, or where there is some doubt or controversy regarding the proposed development. Whilst they may include diagrams for the purpose of assessment, they do not involve design as such.

The purpose of feasibility studies is to:

establish whether the project is viable.

help identify feasible options.

assist in the development of the project execution plan. Feasibility studies might consider:

planning issues;

environmental impact assessment;

statutory approvals;

analysis of the budget relative to client requirements;

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assessment of the potential to re-use existing facilities or doing nothing rather than building new facilities;

assessment of any site information provided by the client;

site appraisals, including geotechnical studies, availability of services, uses of adjoining land, easements and restrictive covenants and so on.

considering different solutions to accessing potential sites;

assessing operational and maintenance issues;

appraisal of servicing strategies;

procurement options.

Various stakeholders, statutory authorities and other third parties may need to be consulted in the preparation of feasibility studies.

A feasibility study must contain a comparison of various options and a project execution plan for the preferred option. The purpose of a feasibility study is simply to determine whether it is viable to implement the project.

(http://www.designingbuildings.co.uk/wiki/Feasibility_studies_for_construction_projects)

5.Answer the questions.

1)When is it necessary to develop a feasibility study?

2)Why do we need to assess feasibility of a project?

3)What are the issues considered in the feasibility study?

4)In what way does the feasibility engineer assess site conditions?

5)Who can be consulted during the preparation of the feasibility study?

6)What must a feasibility study contain?

6.Correct the following sentences.

1)One should undertake a feasibility study when the project is ready for implementation.

2)There should be no diagrams in a feasibility study.

3)A feasibility study describes only one option for the project.

4)The engineering company usually develops the feasibility study on its own.

5)A feasibility study deals with design and construction issues only.

6)The project execution plan is developed at the stage of detailed design.

7.Find the synonyms of these words in the text.

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