two terms are used interchangeably in this community, environmental groups, and

textbook, though it is worth noting there are government agencies. Understanding and
some legal differences in practice. The folks who managing the needs and expectations of these
will do the construction work are called stakeholders is a crucial part of project
contractors. Sometimes, projects will also management.
require subcontractors. The contractor hires
subcontractors to do part of the work that the INITIATING THE PROJECT
contractor is responsible for completing. For To begin a construction project, the
example, a contractor that does not employ full- people involved must make and document some
time electricians may decide to sub out (hire a decisions. This includes details of the project’s
subcontractor for) the electrical work needed to accomplishments, who will do different parts of
finish a project. the needed work, how those people will be
Many other people are impacted by or compensated for their work, and when the
involved with construction projects. For project will begin. Special terms are used for the
example, these could include regulatory staff documents typically involved in starting a
from government agencies or community project. This section defines these and explains
members who live near the construction site. We what each one does. Not all of these documents
use the term stakeholders to refer to all people or are used on all construction projects.
organizations interested in a project, even if they
are not professionally involved. Stakeholders can R F Q ₍RFQ₎
be divided into two categories: internal and Request for qualifications (RFQs) are
external. Internal stakeholders are those directly used by owners to create a list of organizations
involved in the project, such as the owner, that are qualified to take on project work. RFQs
contractors, and subcontractors. External are intended to assure that the organization that
stakeholders are those who are indirectly is ultimately awarded the project work is actually
affected by the project, such as the local able to complete the project. RFQs may also be
used to create a list of organizations that can take

CHAPTER 4 THE PROJECT PROCESS 48

 on anticipated but unpredictable and urgent conceptual descriptions of how the contractor
work. For example, a government agency may would complete the project work, project
use an RFQ to generate a list of qualified pricing, and other qualification factors defined
construction organizations that can quickly be by the owner. A bid responding to an IFB would
deployed to provide disaster response services. be more straightforward, mainly consisting of a
qualified contractor’s price to complete
I F B ₍IFB₎ previously defined project work. Regardless, the
For a design-bid-build project, the project proposal or bid documents should contain
designs are 100% complete before the owner enough information for the client to select an
hires a qualified contractor to do the construction organization to complete the project work.
work. In this case, an owner may issue
instructions for bidders (IFBs). IFBs detail the C / A
work to be completed, and request the Once an owner has selected a contractor,
information that the owner will use to evaluate another document formally describes what the
bids for the construction work. Typically, price organizations agree to. A contract is a wrien
is the most significant determinant in IFB legal document signed by people or
evaluations. organizations. It is sometimes called an
agreement, although agreements may also mean
R F P ₍RFP₎ a non-legally binding arrangement. Broadly, a
In some cases - such as when projects use contract establishes that one person or
design-build delivery methods - design work is organization will do something in exchange for
not completed when the owner hires a something else done by another person or
contractor. In these cases, owners use a request organization. For example, this could be an
for proposals (RFP) to request information from agreement that a contractor will build something
qualified organizations that want to do the in exchange for money from another company or
project work. RFPs outline the work to be done person. More details about the different ways
and ask interested parties to submit a wrien contracts are awarded, and ways that contracts
proposal to be considered for selection. These can be wrien to include greenhouse gas
proposals include more than just a price. emissions reductions, are discussed in the
Contractors will also submit ideas for how chapter on Contracts, Pricing, & Project Delivery.
projects should be completed. This means
While each agreement is different, they
owners can consider factors such as quality,
contain common elements. They typically
contractor experience, and technical approach as
identify the parties to the agreement. These are
part of the selection process.
key project participants. The contract will also
Owners often hire (e.g., procure) describe the work that will be done; this is called
engineers or architects to create conceptual the project’s scope of work. The scope of work
designs before issuing an RFP. This ensures that often refers the reader to technical specifications
the received proposals reflect a clear and project drawings, which are also part of the
understanding of the required project work. contract documents. These are visual plans and
While this is an additional expense for the owner, wrien descriptions of the work to be completed.
it has the potential to improve project outcomes. The agreement includes the price that will be
paid for the completion of the work, and how
P O B and when payments will be made. For example,
Proposals or bids are documents a it is common practice to pay a percentage of the
contractor submits to an owner in response to an total price when a pre-determined percentage of
RFP or an IFB, respectively. They make a case for a project has been completed.
why a particular contractor should be awarded
A contract usually also includes general
project work. Their content depends on what is
provisions and special provisions. General
requested by the owner or client. For example, a
provisions are standard procedures across all
proposal responding to an RFP may include
construction contracts a particular client issues.
49
For example, a contract may include a general a wrien notice to begin the work. This is called
provision that states the contractor is expected to the notice to proceed (NTP). Unless otherwise
know and comply with all Federal, State, and specified in the contract, work cannot start until
local laws and regulations that might impact the this document is issued. Usually, the notice to
project. In contrast, special provisions are proceed serves as a legal record that a contract
unique to a particular project. For example, these has been awarded and that the owner will pay
include when the project will begin, if the owner for the agreed upon work.
or the contractor will procure materials, or the
format for progress reporting. CHANGES DURING THE
As you might expect, contracts are PROJECT
typically more detailed for riskier or more In most projects, things do not go exactly
complex projects than simpler ones. as expected. Sometimes, these are good changes.
For example, someone might notice an
B B opportunity to save money using a different
In any contract, there is the potential for construction method. Sometimes, these are bad
default. Default means that one party to the changes. For example, the project might discover
contract does not do what the contract says they that the soils on the job site will require changes
will. When this happens, it causes problems for to the design. In other cases, a person or
all the parties to the contract. For example, a organization does not do, or is unable to do, what
contractor might default on an awarded project they agreed to do in the contract. Changes to an
if, after being selected, they determine they will ongoing project are very common. Because of
lose money on it. If this happens, the owner must this, some standard documents and procedures
find a different contractor to perform the work. are used to manage any needed changes. These
This delays the project and also means the owner protect the project participants if work deviates
incurs additional costs. from the original contract. This section describes
Because of this, project contracts define these documents and procedures.
an amount of money the contractor agrees to pay
the owner if they fail to begin the contracted
R F I ₍RFI₎
work. Usually, the amount of money is a A request for information (RFI) is a
percentage of the contract value. To ensure this wrien request for clarification regarding the
payment is made in the case of default, a project work to be done. These are most frequently
owner will often require contractors to purchase wrien by the contractor and sent to the owner
a bid bond when they submit a proposal for a and (on building projects) to the architect for
project. Bid bonds are purchased from a third review. These can be sent while a contractor
party that guarantees payment of an agreed responds to a bid or during construction. For
upon amount if the contractor defaults. Private example, an RFI could be needed because of an
owners often require bid bonds of 5% to 10% of inconsistency in the project documents, or to
the contract value. Government contracts may confirm if a design decision would be acceptable.
require bid bonds of 20% of the contract value. Usually, RFIs clarify rather than change the
Usually, bid bonds are inexpensive to purchase scope of work. They are also used as project
because the issuing firm also expects to provide documentation that can prevent
more lucrative performance and payment bonds miscommunication and project conflict. If a
for the project. Performance and payment bonds response to an RFI implies changes to a project
are discussed below. schedule or cost, project participants may issue a
change order.
N T P ₍NTP₎
Once the relevant project participants
C O
have reached an agreement, the owner will issue Projects rarely go exactly as planned.
Certain materials may not be available, or an

CHAPTER 4 THE PROJECT PROCESS 50

 owner may want a design change. Project performance bond will provide funds to the
documents may have errors or omissions, or owner to complete the project as specified in the
something unexpected may be found. When contract. For example, this might mean hiring a
work is different than what is specified in the different contractor to complete the contracted
project contract, a wrien change order will be work. The performance bond does not cover the
used to amend the terms and conditions of that entire project cost. Instead, it assures the work is
contract. This document will describe the completed, and that the owner pays the
proposed change, its reason, and any cost and originally contracted price.
schedule implications. When all parties to the
agreement sign off on the change order, the work P B
can proceed according to what is wrien in the A payment bond protects project
change order. Change orders help avoid participants if the contractor does not pay debts
conflicts that can arise if the completed work is or other costs incurred while completing the
different from what was in the original contract. project work. The contractor typically purchases
Even if changes are verbally agreed to, having it. For example, the payment bond guarantees
changes wrien down and formally accepted by payment if the contractor defaults on payments
all parties documents the new agreement. This to a subcontractor or a materials purchase order.
helps ensure that everyone has the same Like performance and bid bonds, the payment
understanding of what is being agreed to. bond is purchased from and issued by a third
party. Also, like performance and bid bonds, a
C C payment bond is typically required in
Changed conditions are work conditions construction contracts. In other words, all three
that were not reflected in the contract and that are typically required.
the contractor could not reasonably have The company that issues the performance
foreseen. These are also called differing site and payment bonds is financially incentivized to
conditions or unforeseen site conditions. assure that all project participants are paid
Subsurface conditions are a very common type of according to the contract. The bonding company
changed conditions when excavation is required. may also have standing relationships with
For example, this could be an unexpected seam construction firms that can step in and complete
of rock that requires more costly excavation projects that are in default.
despite adequate soil borings failing to identify it
before the project started. Mold and asbestos V E
discovery are common unforeseen conditions in Not all changes that happen during a
renovation projects. Most project contracts will project happen because something goes wrong.
contain a clause that defines what counts as a Sometimes, one of the project participants will
changed condition and how this will be handled. identify a beer way of completing part of the
These clauses are intended to reduce the work that would reduce costs while maintaining
uncertainty and risk in the project completion, as or improving on the planned project outcomes.
these otherwise increase the price quoted by the Typically, these are proposed by the contractor.
contractor. If accepted, it is typical to share any resulting
savings between the owner and contractor. This
P B
can mean it is quite profitable for the contractor
Performance bonds are guarantees that to identify improvements. Because of this, many
the contractor will do the work specified in the contractors undertake formal value engineering
contract and that the work will be of the specified efforts that systematically aempt to identify
quality. Usually, performance bonds are these kinds of improvements rather than just
required in construction contracts. Similar to a hoping they will be noticed by chance during
bid bond, a performance bond is issued by a construction. It should be emphasized that value
third party. If the contractor does not perform engineering does not mean making the project
the project work per the contract, the less expensive in exchange for reduced

51
performance or quality! Instead, it means R
finding more efficient or more effective ways to Retainage is an amount of money in the
achieve similar or improved project outcomes. contract that will not be paid until defined
project work has been completed. For example,
P U
retainage could be held until the project has
Throughout the construction phase of reached final completion. It is often set at 5-10%
projects, contractors submit project updates to of the total contract value. Sometimes, retainage
the client or owner. These describe the work is set at a higher percentage early in the project
completed to date and compare the completed and then reduced or even eliminated after a
work to the original project schedule and cost. defined project milestone is reached. Broadly,
The schedule for submiing these updates is retainage provides a financial incentive for the
usually specified in the project contract. In contractor to finish the project’s final details.
addition, payments are often tied to completing
specific amounts of work or reaching identified A
project milestones. One example project Project acceptance means the project
milestone would be completing a defined owner accepts that the project has been
percentage of project work (for example, 50% completed. Acceptance is often divided into
complete). Another example milestone would be three phases of completion. The first of these is
completing a phase of project work (for example, substantial completion. Substantial completion
all excavation work complete). Project controls means that the owner or client has full use of
are discussed in more detail in the chapter on whatever has been built. However, there may
Cost Estimation & Project Control. still be some minor work that is ongoing.
Substantial completion also releases the
L D
contractor from further liquidated damages and
When parties to a contract do not do indicates the contract is completed. The next
things as specified, they may be subject to phase of project completion is physical
liquidated damages. Liquidated damages are completion. Physical completion means that all
sums of money agreed upon in the contract as construction work has been completed. This
disincentives for not adhering to the contract. includes any punch list items, which are lists of
The most common reason for assessing things that the owner believes are included in the
liquidated damages is because a project is contract but have not yet been completed. For
finished late. Different clients or owners have example, punch list items include things like
different ways of calculating liquidated touching up paint or appliance installation. The
damages. Determining the actual financial final stage in project completion is final
damage incurred when a project is not completion. Final completion means that all
completed on time can be challenging. Instead, project work and documentation is complete and
liquidated damages are calculated using a simple provided to the client as required by both
formula agreed upon in the contract. For contract and law.
example, this might be a percentage of the daily
cost of the original contract (calculated as the
contract value divided by the number of days in
the original schedule times a small percentage).

FINISHING THE PROJECT CHAPTER 4 REFERENCES

Finally, there are standard things that 1
- Project Management Institute (PMI). 2017. A
happen to formally end a project. These include guide to the project management body of knowledge
agreeing that the project work is complete, and (PMBOK guide), Project Management Institute, 6th
ensuring that all payments have been made for Edition, p. 715.
the completed work.

CHAPTER 4 THE PROJECT PROCESS 52

 CHAPTER 4 PRACTICE QUESTIONS

4.1) Compare and contrast bid bonds, payment bonds, and performance bonds.

4.2) What is the name of a legally binding document that describes the work one organization will do in
exchange for a defined payment from another organization?

4.3) List at least three stakeholders that may be involved with a construction project to build new electric
vehicle charging infrastructure in a public park parking lot. List at least two things related to the project
each kind of stakeholder may be interested in, and explain why you think that kind of stakeholder would
be interested in each.

4.4) Create a punch list of work to complete so a student learns every vocabulary term defined in this
chapter. For example, one item on your punch list might be making flashcards. Your punch list should
have at least five items on it.

BONUS: Complete your punch list.

4.5) Write a fictional story using at least ten vocabulary words defined in this chapter. Make sure your
story includes initiating, changing, and finishing a project.

4.6) What are the differences between substantial completion, physical completion, and final completion
of a construction project?

4.7) Review the definition of a project milestone. Give at least four examples of milestones a student
would pass as they complete the project to Earn a High School Degree.

4.8) Using the definition of projects provided in this chapter, explain why Earning a High School Degree
counts as a project.

4.9) A construction project has a contract value of $1,000,000 and is delayed by 14 days. Calculate the total
liquidated damages due if the daily liquidated damages penalty is 0.1% of the contract value.

4.10) Reflect on the most recent class or meeting you aended. Write an RFI to another person in the
class or meeting to clarify something you did not fully understand. Include the clarifying information you
are requesting and enough contextual information so the other person can fully understand your request.
Also include the reason for the request, if you need a wrien or drawn response, a requested schedule for
receiving a response, and the contact information the person will need to respond to your RFI.

BONUS: Actually send the RFI. When you get a response, review it and see if the answer provided all
the information you requested. If not, think about how you could rewrite your RFI to get a beer
response.

53
4.11) Use the internet to look up a standard changed conditions construction contract from a government
transportation agency. (Hint: Google ‘standard changed conditions construction contract from a
government transportation agency’ and look for contract clauses). For the contract you find, document:

(a) the definition of changed site conditions (may also be called differing site conditions),
(b) describe when adjustments to a contract will be made because of differing site conditions, and
(c) provide the link to the website you are reviewing.

4.12) A construction project with a contract value of $10,000,000 has a retainage percentage of 6%. The
contractor has finished all work except for a few minor finishing details and submied a final invoice to
the owner.

(a) Calculate the dollar value of the retainage.

(b) Does the owner have to pay the retainage percentage when the invoice is received? Why or
why not?

4.13) Give an example of how value engineering can benefit both (a) project owners and (b) project
contractors.

CHAPTER 4 THE PROJECT PROCESS 54

 C 5:

P P
 

Knowing who is using

this textbook helps me
make it better.
Curious about the
decarbonization
Were you assigned this
pathway?
in a class? Reading just
for fun?
Learn more in
Chapter 2.
Please let me know!

CEMdecarb@[Link]

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T D U
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CHAPTER 5 TABLE OF CONTENTS

Project Purpose Changes Infrastructure Design & Construction ..................................................................57

The Sustainable Development Goals .................................................................................................................58
SDG 1: End Poverty In All Forms Everywhere.................................................................................. 59
SDG 2: End Hunger, Achieve Food Security & Improved Nutrition & Promote Sustainable
Agriculture ............................................................................................................................................... 59
SDG 3: Ensure Healthy Lives & Promote Well-Being For All At All Ages .................................... 60
SDG 4: Ensure Inclusive & Equitable Quality Education & Promote Lifelong Learning
Opportunities For All ............................................................................................................................. 60
SDG 5: Achieve Gender Equality & Empower All Women & Girls ............................................... 61
SDG 6: Ensure Availability & Sustainable Management Of Water & Sanitation For All ............ 62
SDG 7: Ensure Access To Affordable, Reliable, Sustainable & Modern Energy For All ............. 62
SDG 8: Promote Sustained, Inclusive & Sustainable Economic Growth, Full & Productive
Employment & Decent Work For All ................................................................................................... 63
SDG 9: Build Resilient Infrastructure, Promote Inclusive & Sustainable Industrialization &
Foster Innovation .................................................................................................................................... 63
SDG 10: Reduce Inequality Within & Among Countries ................................................................. 64
SDG 11: Make Cities & Human Selements Inclusive, Safe, Resilient & Sustainable ................. 65
SDG 12: Ensure Sustainable Consumption & Production Paerns ................................................ 65
SDG 13: Take Urgent Action To Combat Climate Change & Its Impacts ...................................... 66
SDG 14: Conserve & Sustainably Use The Oceans, Seas & Marine Resources For Sustainable
Development............................................................................................................................................ 67
SDG 15: Protect, Restore & Promote Sustainable Use Of Terrestrial Ecosystems, Sustainably
Manage Forests, Combat Desertification, & Halt & Reverse Land Degradation & Halt
Biodiversity Loss ..................................................................................................................................... 67
SDG 16: Promote Peaceful & Inclusive Societies For Sustainable Development, Provide Access
To Justice For All & Build Effective, Accountable, & Inclusive Institutions At All Levels ........... 68
SDG 17: Strengthen The Means Of Implementation & Revitalize The Global Partnership For
Sustainable Development ...................................................................................................................... 69
Logistic Frameworks (Logframes) ......................................................................................................................69
Working Down The First Column ........................................................................................................ 70
Working From Left To Right: SMART Indicators ............................................................................. 72
Baselines & Targets ................................................................................................................................. 72
Qualitative & Qualitative Indicators .................................................................................................... 73
Work Breakdown Structures: Defining & Organizing Project Tasks ...........................................................73
Chapter 5 References ............................................................................................................................................75
Chapter 5 Practice Questions ..............................................................................................................................76

CHAPTER 5 PROJECT PLANNING 56

 CHAPTER 5

Project Planning
Without a plan, projects take longer, cost businesses can move freight, or our military can
more, and deliver worse outcomes. The beer defend our country. As for our example of
planning process itself takes time and costs food, there are different priority levels for these
money. However, this investment more than different goals, and those priorities may change
pays for itself through improved project at different times. Also as for our example of
performance. food, different people care more about some of
The first step in effectively planning a these goals than others.
project is defining what you are trying to Different priorities suggest different
accomplish. So, we’ll begin our chapter on ways to undertake projects. For the food
Project Planning by describing the 17 Sustainable example, these different goals might mean eating
Development Goals (SDGs). The SDGs are a at home vs. in a restaurant, eating alone vs. with
widely accepted list of things humanity is trying others, or choosing food that emphasizes
to accomplish. For example, the SDGs establish vegetables vs. meat. It is the same for
goals to eliminate poverty and end hunger. In infrastructure. If we prioritize national
this chapter, I describe each Goal and how commerce, we will design and construct different
climate change is expected to impact our ability roads than if we prioritize local connections to
to achieve each Goal. Then, I provide examples schools and hospitals. These roads would go to
of how infrastructure contributes to achieving different places and require different geometric
each Global Goal. and pavement designs to accommodate different
Next, I describe two widely used tools - speeds and vehicles.
logistical frameworks and work breakdown Because our intentions substantially
structures - that help us translate high level change how and what we build, we have
societal goals like the SDGs into day-to-day established many technical codes defining
engineering and construction project execution. minimum performance levels. Structural codes
are a great example of this. Among other things,
PROJECT PURPOSE CHANGES they define a minimum required infrastructure
INFRASTRUCTURE DESIGN & performance during an earthquake. This defines
CONSTRUCTION the level of risk to property, human health, and
Usually, projects have multiple goals. For life that the community has decided is
example, if you are hungry, you likely want to acceptable. Increased structural performance
eat something. You might want to eat because often means increased cost. But, society has
you will feel beer than you will if you are decided that a minimum level of performance is
hungry or because there are profound health required for a structure to be defined as
implications of not eating. You might also want adequate.
to eat because it is a reason to spend time with In this way, technical codes remove some
people you care about, because your continued (though certainly not all!) individual value
health means you can earn money to support judgments from engineering and construction.
people you care about, or because food tastes They are societally defined standards for what
good. we believe ought to be achieved through
Similarly, infrastructure projects have infrastructure. Next, we turn our aention to the
multiple goals. We could build a road to let most fundamental and aspirational set of Global
people reach hospitals, schools, stores, or sports Goals that exist.
arenas. We could also construct a road so

57
Figure 5.1: The Sustainable Development Goals

Figure Credit: The United Nations Sustainable Development Goals, hps://[Link]/sustainabledevelopment/ The content of this
publication has not been approved by the United Nations and does not reflect the views of the United Nations or its officials or Member
States. Graphics used with permission.

THE SUSTAINABLE remove individual value judgments from project

DEVELOPMENT GOALS decisions. For example, engineers and
The Sustainable Development Goals construction professionals don’t have to decide
(SDGs) are a set of internationally agreed upon how much of a given population should have
global priorities intended to end poverty, ensure access to clean water because this is defined in
peace, and protect the environment. A large and SDG Goal 6. (It’s 100% - everyone!).
diverse community of people has worked Figure 5.1 shows the 17 Sustainable
together to create these. Development Goals. Each Goal prioritizes poor
Among other things, the SDGs establish and vulnerable populations and seeks to
technical specifications for our built improve conditions permanently rather than
environment. Sometimes, these engineering temporarily. Each of the Goals interacts with the
specifications are an explicit part of one of the others; improvements in one are likely to support
Goals. For example, Goal 7 seeks universal improvements in others. As described below,
access to affordable, reliable, and modern energy climate change makes all 17 SDGs more
services. Other times, more judgment is needed challenging to achieve.
to determine construction projects and
approaches that support the Global Goals. Like
any technical specifications, the SDGs help

CHAPTER 5 PROJECT PLANNING 58