Construction Management and Principles

Unit 4 – Construction Management and Principles Joshua Crossley - 650321
Types of construction companies, tendering
processes and key stages of a construction
project
Introduction: The focus of this report is to identify and compare the different types of construction
companies. The focus will also be on explaining and comparing the different tendering process in
construction and recognising the key stages of a construction project from start to finish.
P4 – Identify the different types of construction companies in the market
 Main contractors – Main contractors can either be publicly or privately owned. Job contracts won by
main contractors are significantly large and hold a high value. Because of the size of the projects,
main contractors usually subcontract a lot of the work. Therefore, the employees of a main contractor
do not typically include any tradesmen or operatives but instead an office-based team like designers,
surveyors, managers and engineers.
 Sub-contractors - Sub-contractors will find work and jobs through main contractors. Sub-contractor
companies are specialised in one part of the building. Multiple sub-contractors working across a
project will contributes to the construction of different parts of the building. For example, a steel
erecting company will erect the steel frame structure and concrete planks, but a concrete company
will grout the concrete planks.
 Owner-Builder – An owner-builder is not a contractor, an owner-builder will act as their own
contractor. They will not have a client as what they are building is being built for themselves to own.
The owner builder either carries out the building work themselves or will have worker working
for/with them. Before any construction begins, an owner-builder is required to apply for an owner-
builder permit and a building permit from the local council. These give permission for a project to
start and will allow them to undertake the same work as a builder who is licensed. Although an
owner-builder must still follow all the same responsibilities that come under The Health and Safety
at Work Act 1974.
 Real estate/property developer – This can either be an individual or a business. As an individual, they
are a type of owner-builder where the only difference is, they tend to sell the property before it is
complete and focus more on making a profit rather than ownership.
P5 – Explain the relationship between different construction organisations
In all industries, maintaining a good relationship with different organisations can benefit a company in many
ways. It can lead to projects being completed successfully, help the company grow, increase work
efficiency, create respect between the companies and creates link between organisations across the industry.
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Unit 4 – Construction Management and Principles Joshua Crossley - 650321
Maintaining a good relationship is done through communication and keeping engagement between
organisations, it is important for it to be easy for organisations to communicate with each other so there is
understanding between them. Different organisations are specialised in different things so one organisation
can learn from another in its speciality. Construction organisations often tend to try and use the same
supplier and sub-contractor for a lot of things so that they know they are investing their money somewhere
safe. Using a trusted company can make sure the quality, delivery, cost and time are all ensured. The works
carried out by sub-contractors must be up to standard as if not, it can cause the relationship to lose its bond.
The relationship between customers/clients is important too. If a company manages to maintain a stable
relationship with its clients, they are likely to win contracts with them again. It is mostly down to the
commercial team to build and maintain trusted relationships between clients as they are the ones who
communicate with them the most and they are the ones who utilise the relationship the most. By feeling that
an organisation responds to their needs, customers are more likely to continue using their products and
services. Additionally, by maintaining a level of communication with customers, the business is able to
identify potential sources of costly problems before they come to a head (Relationship Management in
Construction, 2021).
M2 – Analyse the catalyst which connects construction companies, including contracts and tendering
As previously mentioned, companies communicating with one another is what maintains the relationship
between companies. As well as communication, networking is vital, interacting with and exchanging
information with other companies means companies will notice and learn from each other. The more
companies a company networks with, the more contacts they can build up and keep professional
relationships with. Creating a strong network of organisations means a company can always refer to the
companies within in network for advice and help which will benefit the company by helping it grow. The
tendering process and contractual agreements further improve the link between companies. Once a network
is built, after tendering with the company and a contractual agreement has been established, the relationship
strengthens and improves. A contractual agreement means that both companies benefit from each other
which is why it improves the relationship.
Depending on the sort of relationship that companies have between them, there are multiple types of
tendering. An invitation to tender may be issued for many different requirements, including demolition,
equipment supply, supply of raw materials and more. In construction, the tender process is usually to locate
and select the contractor that will carry out the works (Taylor, 2019). Below is each type of tendering
process summarised:
 Open tendering – A contractor will advertise a contract which will be open to anyone interested in
tendering for it. With open contracts, due to the contract being open to anyone, you will commonly
find that the contractor receives a high number of tenders giving the contractor plenty of options to
choose from. A benefit of open tender is that they provide an even opportunity to all sub-contractors
meaning that new and upcoming suppliers/sub-contractors have a chance to win contracts, make a
name for themselves and build relationships with companies.
 Selective tendering – This approach is the same as open tendering but rather than the contract being
open to anyone, only certain suppliers and sub-contractors receive an invitation to tender. This means
the contractor’s choice is refined to suit the needs of the project. Sometimes you will find that
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Figure 1, an example of a tender programme schedule
Unit 4 – Construction Management and Principles Joshua Crossley - 650321
organisations prefer only for works to be carried out by companies they have used before, especially
with specialist works which is why selective tendering is the chosen process.
 Negotiated tendering – Similar to open and selective tendering once again although with this
tendering process, the contractor/client will only reach out to one supplier/sub-contractor. This could
be because the client trusts this supplier and does not want to use anyone else. A price will be agreed
and using negotiated tendering means the client can be confident and saves time.
 Serial tendering - Serial tendering is where tenders are submitted based on typical quantities or
schedule of works. This enables tenders to value works over a series of similar projects, for a fixed
period of time. For example, minor works, repetitive work or maintenance contracts (Taylor, 2019).
 Framework tendering - Framework tendering includes documentation that outline the scope of works
or services needed over a specific time period. Clients may use framework agreements to decrease
timeframes and other risks in continual building contracts. Clients may give price or risk adjustment
systems where they may make modifications for each type of work required to further facilitate the
process (Taylor, 2019).
P6 – Identify, with examples, modern construction processes and sequences used within today’s
industry, highlighting the way they respond to sustainability needs
One method of construction new is volumetric construction ( commonly referred to as modular
construction). This is where pre-engineered construction units, usually referred to as cabins, have their parts
made in a factory somewhere, are assembled in the same factory or another factory closer to the site
location. It is most commonly used for volumetric high rise housing buildings (as shown in the image
below) and as the construction industry progresses into the future, the need for space becomes ever more
challenging every day. Modular construction allows for sites to be smaller as material storage areas are not
so much of an issue. In busy cities with a lot of people, high rise volumetric buildings utilise the limited
space with buildings that can
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