1.3 Brief about 22 Organizations: Part 2

Out of 22 organizations, in part 1, we have discussed 9 ownership based organizations, here we will look into general organization structure and fee structures and operations of services based and specialized field organizations.

Part 2: 11 Services Based & 2 Specialized Fields Organizations

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1 & 2 CONTRACTORS & SUBCONTRACTORS

Working as a contractor/subcontractors means execution of the project with all organizations. One has to put hard work which results into lots of proud feeling of achievements (can physically see the construction progress). Detailed coordination required with multiple agencies to achieve desired results.
Generally, the main contractor is responsible for complete execution of the project, whereas subcontractors were assigned part works in projects. Secondly, the main contractor share’s major responsibility of execution planning and implementation with complete resource allocation, whereas subcontractor concentrates only on part work with basic materials and machinery.
The contracts can be item rate, with or without material or partially supplied materials, lump sum basis or turnkey basis.
Timely and quality execution are important to improve the profitability of a contract. Effective contractual correspondence is helpful in safeguarding penalties as well as improving profitability by executing extra items with same resources.
There is a possibility that an organization is working as a contractor at project A, and at the same time working as a subcontractor for project B. This may be due to the type, size, specialization of execution. An organization working as subcontractor for Infrastructure projects but at the same time working as main contractor for real estate, industrial, institutional projects and vice versa.

Generally head office have departments such as business development, corporate communications, finance, accounts, audit, company secretary, legal and contracts, administration, human resource development, training, procurement, subcontract, IT, quality, environment, health and safety, tendering, equipment and engineering (design, geo-technical, planning, budgeting and monitoring)
Regional/branch Office is possible in certain region based on the number of projects in that region. In some cases, few of head office departments will have their representatives accountable for that particular region only but monitoring and controlling projects will be from head office only.
Project wise setup will be based on the quantum of work involved, but to maintain quality of construction, full setup of the engineering team and associated departments will be deployed at site with defined hierarchy of accountability and responsibility.

General Organization Chart - Project Level — General Organization Chart – Project Level

All standard operating procedures will be executed diligently and will be monitored by respective head office departments.
Contract duration ranges between 2 – 10 years, based on scope of work assigned and related schedule of project.

3 Project Management Consultants

For all types of construction activities and for all institutes, special clients such as millionaires, billionaires, societies (common facilities, redevelopment), social organizations.
Generally consultancy business is on fee basis (fixed fee, monthly/project progress percentage, or variable as per project schedule or contract conditions)
PMC is appointed by the client because of their in-depth knowledge of project management from start till completion of project and they act as a bridge for multiple agencies working for the project.

They have to balance themselves with the help of processes & systems and then interact with clients, architects, consultants, suppliers, contractors, local agencies to resolve issues and convey decisions for timely execution of multiple activities. Few organizations focus on value engineering aspects, which will be beneficial to all related parties. PMC has full responsibility with limited authority.and hence It’s a tough assignments of balancing all project stakeholders.
Duration of the project is based on scope of work which varies as per client’s organization strength and project’s requirements.

4 Construction Manager

Work profile is mostly the same as project management consultants but focused only on execution. Construction manager helps clients to improve profitability of projects due to limited exposure of execution only. Sometimes they replace main contractors with subcontractors means there will be introduction of more labour contractors, which leads to additional work for the cost management and execution team.

5 Development Manager

Generally financial institutions/private organizations hire development managers on a fee basis for construction of projects from inception till financial closure.
As development manager’s are representing client’s in totality, their organization structure caters to project’s requirements with relevant support from head office.
All responsibility lies with the development manager except funding the project but they have to adhere to defined contractual conditions with clients mainly in terms of budget and schedule to execute desired quality product.
Development managers take decisions on behalf of clients in favour of project profitability whereas project management consultants interacts with clients to make major decisions such as design, contractor finalization.
Development manager’s are practically involved for complete project duration.

6 Cost Management Consultant

All client’s aim is to improve profitability of an organization, easiest way is by monitoring and controlling expenses based on budget for which they take help of cost consultant. They hire cost consultants due to their detailed knowledge of processes and systems of cost management. Cost management team’s scope varies as per client’s requirements and generally their scope includes budget creation, tendering, contracting, billing and cost monitoring & controlling with the help of cost report.
Cost management consultancy business is on fee basis (Fixed fee – monthly/project progress percentage, or variable as per contract amount or project duration)
Cost management team interacts with clients, architects, consultants, suppliers, contractors, etc. to improve profitability of the project with the help of value engineering.
One of the responsible profiles, wherein accuracy & detailing of each work is of prime importance, as outcome is directly connected to profitability of project,
Cost management consultant’s contract period is for full project duration, sometime they are actively involved for financial closure of the project with finance team.

7 Property Management Consultant

Property management consultants are hired by clients to take care of property after practical completion of the project. They become client’s representatives for managing developed products and monitor’s revenue generations.
Generally consultancy business is on a fee basis (Fixed fee -Monthly or variable as per contract amount) and it varies for projects, as per scope of work which is based on strength of client’s internal team.
Many residential and commercial projects have building management systems, wherein every activity in the property is being monitored/controlled with the help of technology. (Software/App). For example – efficiency and effectiveness of equipment/machinery, optimum utilization of energy by monitoring/controlling auto sensors at multiple locations (staircase lights, external lights, club house and other amenities air conditioning, sensors on water pumps, usage of number of lifts).
Apart from facility management work, property management team generally takes care of all other aspects of property as per defined scope of work, for example : Replacement of equipment/ machinery, technological changes (up-gradation), statutory requirements (taxes, audit), execution of new small construction activities.
Contract period varies from project to project and client to client and it is for 1/2/3 years, renewable as per defined terms & conditions. Generally contract period of 3 years is preferable for both parties.

8 Architects

Architects are instrumental in creating amazing structures based on design briefs shared by clients. They lead the team of various consultants and controls all four stages of design management. Concept stage wherein clients approves their design. Schematic stage wherein all required consultants will be on board and drawings will be submitted to concerned government organizations for various approval. Third stage of design development involves lots of brainstorming, coordination of multiple requirements from clients and consultants. At this stage the cost management team commences work of floating tenders for construction purposes. Fourth stage is Good for construction drawings that are required for finalizing contracts as well as for project teams to commences execution. It is beneficial for the execution team to receive all goods for construction drawings in advance, so that they can plan all activities which helps in accelerating the project process.
Architect’s monitors project execution as per final design aspects and contributes in value engineering proposals.
Architects services are on a fee basis (Rs/sqft) which varies generally on the quantum of development, critical design parameters, co-ordinations with a number of agencies.
Extensive use technology by architects for creating drawings with software like Revit, BIM, etc., for effective and efficient communications, better presentations.
Contract is for the entire project duration including submission of as built drawings.

9 Liaisoning Architects

Liaisoning architects’ roles is different from design architects, as they focus on the importance of development norms and their interpretation/clarifications. They interact with clients and design architects during schematic stage drawings which are required to be submitted to concerned authorities for approval.
Coordination is very crucial in aligning all concerns (client/architects/consultants) for proper documentation, their submission and regular follow up for getting required approval from various authorities at multiple stages of the project.
Liaisoning architects services are on a fee basis (Rs/sqft) which varies generally on the quantum of development, phases, co-ordinations with a number of government departments.
Generally project commencement certificate and occupation certificate are two major milestones for liaisoning architects. Contract is for the entire project duration till receipt of last required approval from concerned authorities.

10 Structural consultants

Structural consultants strengthen the creativity of architects/departments for buildings/infrastructure projects by introducing different designs (Concrete, steel) at multiple stages. Use of software such as autocad, revit, staadpro, etabs are helpful for effective and economical design.
Structural consultant’s interact with architects and other consultants for consideration of total load factors for design. Geo-technical report (soil parameter, ground water table) is helpful in determining type of foundation and relevant details. They also interact with peer review consultants as per client’s requirements and modify design based on suggested desired changes.
Structural consultant fees are on the Rs/sqft basis, which varies as per type, quantum, phases of project, depth of involvement in designs for critical/challenging structures.
A structural consultant is an authority who issues structural stability certificate, hence monitoring execution as per good for construction drawings is crucial for their team. They share as built drawings to architects for record as their last milestone of the contract.
Contract duration is from commencement till receipt of certificates.

11 Surveyors

Surveying plays an important role in defining coordinates, topography of any structure, area, etc. either on land or in marine constructions.
Consulting firms work on big projects, as well as an individual can work independently for building projects.
Geo-technical surveying is an integral part of engineering, project development to determine not only soil parameters, water table level, geological details, etc for defining foundation’s design basis but also for addressing environmental issues if any.
Use of latest equipment and technology are important for delivering accurate data for execution.
Services are on a fee basis which depends on scope of work and contract duration.

Specialized fields

12 Precast Yard, RMC plants

Factory-like atmosphere, wherein routine manufacturing can take place along with research to make products more economical and operational friendly. Detailed engineering aspects (economical design, effective size, shape, efficient use) are considered to suit project requirements.
Use of the latest technologies, machinery, transportation factors, installation procedures, etc. are important for design, manufacturing and execution.
It’s a specialized field having zero tolerance limit hence accuracy and quality are important factors for the final product.
Teams are applying their scientific approach for experimenting with new technologies as well as new product mixes for economical production.
Precast yards are mainly set up by contractors for execution of infrastructure projects, but some precast yards are for manufacturing and execution of real estate projects. RMC plants are set up by infrastructure companies for their own use and generally for real estate projects, it is the third party who owns it. They manufacture RMC as per client’s requirements and transport it to desired location for which they charge the client for per cum of concrete, whereas pumping charges are as per contract terms.
Precast yards and RMC plants are mainly at tier 1 & tier 2 cities for the real estate sector whereas for the infrastructure sector, it’s practically at all major infrastructure projects.

13 Entrepreneur

The most challenging option is a person’s desire to take their own firm from local level to multinational level. Aim is to increase the profitability of a firm which is dependent on various internal as well as external factors. To create brand image, marketing, delivery of good quality product within specified timelines & defined budget is important.
Investors would prefer to invest mainly in an organization having proper processes and systems, highlighting transparency (monitoring and controlling system) with the help of high quality professionals/teams & successful growth stories enhancing credentials. Business starts with finance and ends not only on return of capital but with profitability. Finance allows projects to get executed along with sales/lease of product which will bring back capital with profit. Investment period varies from project to project based on business strategies.
Visionary, leadership, discipline, ownership for every result (+/-), courageous, technological inclinations are few qualities required for successful entrepreneurs along with lots of brainstorming within as well as outside relevant fields.
Only very few lucky/courgeous people get an opportunity to work with family, partnerships and become part of any construction business as an Entrepreneur.