Construction subcontracts

The S curve in Fig. H.l is a graphic display of the progress of the total construction activities. It is prepared from the loaded MPS shown in Appendix E. It is superimposed on the bar chart type illustrations of the scheduled progress of the main construction subcontracts ... 

Bechtel, performed by New Zealand construction companies. A total of 49 construction subcontracts were issued. 

Quality control examinations shall include the requirements of the construction organization s Quality System Program for materials, products, components, workmanship, quality documents, procedures and personnel qualifications, construction, and subcontract services. 

GR-6.2.2.3 Subcontractor Control. The subcontractor services shall be controlled by the processes of procurement, quality review, and surveillance, including receiving inspection, supported by the proper documentation. The subcontractor shall provide a Quality Control System (manual), documented procedures, and applicable work instructions. The construction organization shall be responsible for approval of all subcontract services. 

Break down construction into several discrete subcontracts and plan detailed engineering to support a staged subcontracting plan. 

Execute construction on direct hire basis and/or reimbursable subcontracts. 

Tables 10.1, 10.2, and 10.3 illustrate a set of factors used by one chemical firm for fiuids-handling and solids-handling plants. The factors and ratios used to break down the total cost into the various direct and indirect accounts are based on a 100% subcontract construction where most of the labor-related field indirects are collected with the subcontract labor costs and the "field indirects" account refers to only the construction management and the site general conditions costs. Field indirects are discussed in more detail in Section 19.9.

The materials column includes all the equipment and materials usually purchased by the Owner and/or general contractor - to be installed by the subcontractors. The subcontracted labor column includes all costs, direct and indirects, incurred by the subcontractors for the installation of these materials. Construction equipment rentals as well as contractor overhead and profit must also be included. The accounts traditionally treated in this manner are ... 

The subcontract column includes those items where a vendor or a subcontractor supplies both materials and erection. The cost includes materials, labor, labor indirects, construction rental equipment, and contractor/vendor overheads and profits. The following accounts are traditionally executed and estimated on a subcontract basis. 

The estimated construction hours, even those related to subcontract work, must also be shown in the estimate cost summary. That information is vital to prepare the e.xecution plan and the construction monitoring systems. 

The Field Costs cover all costs associated with construction management and are discussed in detail in Sections 19.9. They do not cover the indirects associated with subcontracted labor included in the labor column. 

IN THAT CASE, THE RECOMMENDED APPROACH WOULD BE A MODIFIED REIMBURSABLE EPC CONTRACT REQUESTING THAT THE CONTRACTOR EXECUTE CONSTRUCTION THROUGH COMPETITIVE LUMP SUM OR UNIT PRICE SUBCONTRACTS. 

EPC contracts requiring that construction is subcontracted on a lump sum competitive basis. This is the approach discussed in this section. 

Construction direct hire/subcontracted, union/merit shop, etc. Contractors Work... 

The discussions are limited here to only the execution of detailed engineering. All other related functions, project and construction management, purchasing and subcontracting, as well as project controls, are discussed in other chapters. 

The construction management option of an independent C.M. does not seem to offer any advantages to either large projects or small ones. It is essentially the same as the first two options, executed through lump sum subcontracts, with the disadvantage that the Owner must retain a C.M. and still assume the responsibility instead of the contractor. On small enough projects, the Owner should act as its own C.M. and save construction management fees. 

The choice of design presentation will have an impact on costs, especially if construction is to be subcontracted on a lump sum basis. If that is the case, engineering work must also be scheduled accordingly. 

Labor Costs - All accounts estimated on a subcontract basis include the cost of labor and must be listed in the estimate under the "Material and Labor Subcontract" column. The hours included with the estimating units are intended only to determine construction staffing for planning purposes. 

Field Indirects - If the Owner acts as construction manager, the Field Indirects should not exceed 10% of the total labor and subcontract columns. If construction management is done by a contractor, follow guidelines in Section 19.9. 

This factor is to be applied only to the equipment listed in the estimate under the "Materials" column that requires minimum or no assembly by the regular construction forces. Equipment that requires field assembly by the vendor, such as large storage tanks, large boilers, materials handling systems, and other complicated packages, should be listed in the estimate under the "Subcontract" column. The cost includes both materials and field costs. 

When construction is to be subcontracted, some accounts (civil, insulation, and paint) are usually estimated on a total cost basis, combining both materials and labor. Other accounts (piping, electrical, instrumentation, equipment erection) are estimated and shown separately as material and labor. In that case, the labor should be loaded with the subcontractor s field indirects plus overhead and profit. The field indirects would reflect only the cost of construction management. 

When construction is totally subcontracted the field indirects are a mixed bag some are included in the subcontracts while others must be provided by the construction manager or the general contractor. The field indirects likely to be provided by the construction manager or the general contractor are identified in the Field Indirects Checklist. 

In order to minimize cost through the most effective use of in-house personnel, we will follow the small project approach acting as general contractor and subcontract engineering and construction services on a discrete basis as required. 

In the meantime the Project Manager can use the construction hours breakdown by disciplines to prepare a preliminary execution plan to refine the field staffing requirements and prepare a meaningful, tentative plan to subcontract construction work. 

The total cost of the field indirects is 100-130% of direct labor costs (direct hire) plus 15-20% of subcontracts and inversely proportional to project size. In the following breakdown, an asterisk denotes services usually supplied by Construction Manager or General Contractor. 

Site construction of the project requires organizing the constmction bid packages, selecting contractors, and writing subcontracts. These contracts include a specific scope of work for the various construction and installation tasks and the implementation of appropriate procedures for expediting the project. An equipment installation document is then prepared for the construction contractor (9). This document verifies that equipment is properly connected to the defined utilities (air, electrical, water, sanitary drains, product, cleaning systems) and that the contractor has a planned schedule of events. Arrival of the equipment will initiate the startup and testing phase for the equipment. 

The complexity and expense of fab construction and operation have led to the development of detailed models for the cost-of-ownership of tools and usage of consumables. These models often call for the subcontracting of services to specialized firms. Such services include front-end processes such as siliddation and ion implantation, and back-end processes such as assembly, electrical test, and packaging. Foundry manufacturers such as Taiwan Semiconductor Manufacturing Corporation (TSMC) and Singapore s Chartered Semiconductor Manufacturing represent successful examples of this trend. 

Field construction was subcontracted by Bechtel in a number of work packages tailored to allow the greatest possible participation by New Zealand contractors. 

Construction management was under the overall supervision of Bechtel. New Zealand nationals comprised approximately half of the management in the field the other half was recruited from USA, Australia, Canada and the United Kingdom. Construction was done on a subcontract basis, managed by... 

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