The Benefits of Standard Contracts in Construction Projects
The work that are undertaken under the contracts and the value of that construction work is very different as ranging from the minor home renovations to billion dollar resources projects and infrastructures. The difficulty and diversity of risks and all the administrative procedures that are involved in constructing the projects has altogether resulted in the industry perception. The perception of the industry is that the utilization of standard forms of the contract tends to reduce avoidable transaction costs and overall leads to a greater efficiency in procurement (Loewenstein, 2004). Therefore, when considering the resource projects that use a standard form contract, AS4000 is recognized as the most appropriate standard forms that can be utilized without the amendment (Paterson, 2012). The AS4000 contract consists of a general condition of the contract that is appropriate for a variety of constructions and building contracts that includes mechanical, civil as well as AS4901. Therefore, AS4901 is a companion subcontract document that is specially prepared to be well matched with AS4000. The use of standard contracts also provides many advantages such as they can protect the legal interests and intellectual property and can decrease the risks of not considering ordinary specifics of a contract.
Appropriate organizational structure or layout is very essential for the successful execution of a project. Basically, in construction project the organizational structure plays a vital role in successfully completion of the project. For the success of the project the construction company should deploy skilled as well as unskilled staffs, updated and high-end technologies, which are appropriate for this particular project as these ensure the proper accomplishment of the construction project (Bolles, 2002). The project also has a very good organizational structure with the fittest person in each organizational position. Above all, there is a managing director, who is proprietor of the company. There are two directors who work under the MD, and in absence of MD they take all the responsibility and handle the entire task on behalf of MD. Under the directors there are chief project manager, chief engineer, fiancé manager, personal manager and marketing manager. Under the chief project manger there are four project managers who are handling four different projects. Finance manager is responsible for keeping all the accounting in detail and help in setting as well as accomplishing the financial goal of the company, there are four members in his financial team. Chief engineer is responsible for timely completion of the project as well as accountable for the quality and the standard of the project (Gould and Joyce, 2009). Personal manger face all the HR issues, the personal manager has a assistant who help the personal manager in successfully managing human resource. The marketing manager is responsible for effectively marketing the projects of the company beside this the marketing manager is accountable for the sale of the building project of the company.
Understanding the Organizational Structure of a Construction Company
During the construction of a building project, several adverse situations can be arisen and the construction company must be ready for those adverse situations. There might be seen some hazardous substance on the project site. Therefore, environmental planning must be there in the list of special condition. Effective co-ordination of the tasks is most necessary. Industrial relation must be there as at time of crisis it can be helpful. The quality of the project must be of higher standard and in the quality the management should not compromise. The proper projections of the work help the accurate execution of the project. Proper programming of the project work must be existed; it helps in appropriate execution of the work. The disputes must be solved within the time (Hayes, 2007).
In case of the discovery of any hazardous substance the subcontractors should not disturb the materials in any situation and must contact the higher authorities and inform about the hazardous substance. The subcontractors must ensure that all persons should be protected from the exposure of the hazardous substance. All the legal procedures must be completed by the construction company (Lambeck and Eschemuller, 2009). Therefore, all the necessary documentation must be submitted to the concern authority as well as the company should have all the requisite legal papers so that can avoid the legal hazardous consisting with the project.
- What is the name of your company?
- How long have your company been in construction business?
- How long have your company carrying out business operation in this area?
- What are your specialized areas or in what fields you are specialized?
- Have you all the necessary licence and authorization for carrying out this type of project?
- Have you adequate insurance coverage for your employees and other staffs?
- What are compensation policies for your staffs?
- Have you won any awards for your service?
- What are your educational background and your experience in construction?
- Have you proper certificate for handling these types of construction project?
- How many projects similar to my project, have you handled in last six months?
- What is your warranty?
- How often will you be on the job site?
- Do your company have a Dun & Bradstreet number?
- May I have a list of suppliers you might utilize on my project?
- What is your bank?
- Have you any investor?
The selection of subcontractor is an essential requirement in process of successful construction. There are several factors, which taken into consideration for selecting effective subcontractor in a project. Improper selection may leads to delay and bad quality of assigned work. Therefore, it is very important to measure and analyse the qualities, skill and background of the subcontractors. There organisation uses different factors and statics to identify the ability and legal measures of the subcontractors. The first approach toward the selection process is evaluation of the contractor or subcontractor experience and then bargaining approach on the price of the agreement. There are forty-six factors, which influence the selection procedure (Hudson and Sobol, 2006). There are ten clusters, which are essential for measuring the capability of the company; they are as follows.
- Cost
- Quality
- Safety
- Behaviour and experience of the working staffs
- Safety
- Insurance, repair and warranty of the equipments and employees
- Disputes and risks
- Time
- Experiences of the company
- Tender
- Others (Site proximity, commitments, resources, Relationships)
In recent years, the use of subcontractor in a process of construction has raised drastically. The constructions project has became more complex and specific to the purpose. Therefore, it is very difficult for a main contractor to provide skill workers and technology for every specific job in the project of construction. So, the contractor hires different subcontractors to complete the process of construction. Therefore, it is very essential and significant for the contractor to have effective control over the entire process of construction to have a successful outcome. Apart from the positive aspects, there are some negative elements like institutional gap between the main contractor and the subcontractor, which initiates disputes in the working place. The communication gap is also vital threat to the development process of the threat. In order to eliminate such kind of issues a effective strategies implemented to improve the relationship between the main contractor and subcontractors. The training programmes in course of time will helps to motivate the workers and help the worker to have necessary knowledge for the betterment of working process. The control strategies of the subcontractor mainly based on the procurement and cost effective purposes. However, for overall higher performance the control strategies should be build based on schedule, safety and quality aspects of the working process (Wambach, 2009).
To improve the performance level of the subcontractor in a construction process, the main contractors are focused on the process of development of newer strategies and innovative planning. For the overall development process, the contractor should involve the elements like quality, cost and safety of the workers. It is very essential to have properly procurement standard for the subcontractor. If the subcontractors are qualified, it is easier for the main contractor to implement plans for the development process. It is very essential to monitor the ongoing task on day-to-day basis. The subcontractor should follow the quality policies for the effective development of work process (Targeting general subcontract needs, 2008).
References
Bolles, D. (2002). Building project management centers of excellence. New York: AMACOM.
Gould, F. and Joyce, N. (2009). Construction project management. Upper Saddle River, N.J.: Pearson Prentice Hall.
Hayes, R. (2007). The Yale building project. New Haven, Conn.: Yale School of Architecture.
Lambeck, R. and Eschemuller, J. (2009). Urban construction project management. New York: McGraw-Hill.
Hudson, C. and Sobol, R. (2006). Construction zone. Cambridge, Mass.: Candlewick Press.
Targeting general subcontract needs. (2008). Aircraft Eng & Aerospace Tech, 80(5).
Wambach, A. (2009). How to subcontract?. Economics Letters, 105(2), pp.152-155.
Khoury, D., & Yamouni, Y. (2007). Understanding contract law. Chatswood, N.S.W.: LexisNexis Butterworths.
Loewenstein, M. (2004). Building and construction. St. Leonards, N.S.W.: The Continuing Professional Education Dept., College of Law.
Paterson, J. (2012). Unfair contract terms in Australia. Pyrmont, N.S.W.: Thomson Reuters (Professional) Australia
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