Documents in Construction Industry
The Heavy Construction Industry Relies Heavily on Document Management
The industry that has built the world's skyscrapers, highways, airports, petroleum refineries, satellite launch sites and atomic power plants relies heavily on document management to operate efficiently. This heavy documentation occurs at two levels - at the level of the project owner and at the level of the construction contractor.
Construction Project Owner
Governments and large industries are the typical owners of construction projects. They float tenders for specific projects through:
- Conceiving and planning a project to achieve certain objectives.
- Detailing the project through designs and specifications
- Computing quantities and inviting competitive bids to execute the project
The documents generated during this stage include:
- Statement of project objectives and a description of the project
- Study reports on environmental, funding and legal aspects of the project
- Design drawings and specifications
- Bill of quantities of the different works involved in the project
- Preliminary cost estimates for these quantities and for the total project
- Invitation document and supporting details for distribution among bidders interested in executing the project
After offers are received from the bidders, the owner comes into the picture again to:
- Compare the bids by preparing detailed comparison statements that bring out different aspects of the bids
- Conducting negotiations with short listed bidders with a view to clarify any points and firm up the rates for each item in the bill of quantities. These negotiations are documented in the form of minutes of discussions and correspondence.
- Awarding the contract to one or more bidders who are finally selected to execute the whole or parts of the project. The formal contracts document this step.
The owner then typically works with the contractor to develop work schedules and target completion dates. Once the work starts, the owner arranges for inspections of the works carried out before authorizing progress payments. In addition to the work schedules, inspection reports and payment authorizations, there would typically be much correspondence and discussion reports created as part of the progress chasing efforts during this phase.
Construction Contractor
At the contractor's end, there are two stages - pre-contract and post-contract. During the pre-contract stage, bidders would be working to get a remunerative contract. Towards this end they would work out cost estimates for each item in the bill of quantities and for overhead expenses likely to be incurred for the work as a whole. Quotations from suppliers and sub-contractors, time and cost estimates for the detailed works involved (with supporting computations), details of any licenses and permissions applicable and a great deal of correspondence and reports would be typical documents generated during the pre-contract phase.
Post-contract, the emphasis would be on controlling work progress, inventories and costs at project execution sites. Normal business documentation such as work schedules, purchase invoices, materials consumption records, attendance and time records, work progress measurements, inventory records, payrolls, cash records and so on would be created in the course of the contract execution.
An important document created at this stage would be the work measurement and inspection register. Project owners verify the claims of work done and its quality, and accept, modify or reject these. It is on the basis of these verifications that payments would be authorized to the contractor. Payments are typically made in a progressive manner with part payments against works completed since the last payment. The contractor would maintain an account of such payments received and would include these in the final bill submitted after completion of the work.
Conclusion
Construction projects have a project owner, typically governments or large industries, and a contractor who executes the actual construction work. Project owners invite bids from several pre-qualified contractors to execute the project. The bids are compared and evaluated before the contract is awarded. Work completed is measured in a progressive manner and progress payments are authorized if the work meets required quality criteria. Great deal of documents are generated during these processes.
We would look at document management in the construction industry on a separate page.