Contractor


The contents of this booklet are organized on the basis of an average size contractor, which could be a turnkey contractor, main contractor or an individual trade contractor.

No considerations have been given to the corporate form or ownership.

The contractor possesses the in-house capacity to carry out for example concrete works, erection of concrete elements, earthwork operations and sewerage. A chartered sewerage contractor is often contracted.

The company possesses the equipment necessary to carry out basic tasks but does not own specialized equipment such as scaffolding and cranes. Due to lack of funds it is often an advantage to hire equipment  rather than owning it.
The main emphasis will be put the contractor working as a main contractor and/or individual trade contractor.

The contractor is a member of
The Danish Construction Association (Dansk Byggeri) and has a collective agreement with all members of staff.

The company described in the case has not defined any political aims with respect to such issues as innovation, environment, project sales promotion or personnel policy. It is, however, of vital importance that the company complies with current legislation, agreements and codes of practise applicable to this line of business.

For further studies of legislation etc. we refer to
The Danish Construction Association
Project management
Contract forms
Risk management
Organization and management
Remuneration and conditions of employment
Communication and logistics
Quality assurance and management
Environment- and safety management
Financial aspects
Tender
CEC-construction evaluation centre
Own production
Summing up experience
Legal aspects


Enclosures examples

Project management

The contractor undertakes turnkey contracts as well as main and individual trade contracts with a focus on the following key competencies:

  • Calculation and management of main contracts.
  • Calculation and implementation of own production within earthwork, sewerage, concrete works and erection of industrialized building components.
  • Rendering different types of service.

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Contract forms

Individual trade contract

Typically the client will start by entering a design agreement with an architect and an engineer.

Once the project is ready, the client will enter contracts with a number of individual trade contractors corresponding to the number of trades involved in the construction.  Coordination and management rests with the client – typically a by external consultants.

 Grouped contracts

The client may simplify the management to a certain extend by grouping related trades. In doing so, the coordination and the sharing of responsibility become more transparent.  As it is the case with individual trade contracts, the coordination still rests with the client, but contrary to the individual trade contracts there will be fewer contracts to coordinate – and thereby reducing the risk.

 Main contract

Within this contract form the client negotiates with one contractor only. Project management is transferred from the client to the main contractor. The project responsibility, however, still belongs to the client.

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Risk management

In order to ensure the reputation and the earnings of the company and thereby its survival it is vital to undertake risk management of the project throughout the building project. The risk management applies to such issues as choice of methods, choice of equipment, choice of partners, control of client solvency etc.
We have chosen to use the below listed tools in the risk management

  • Contractor’s checklist of received tender documents
  • Project journal
  • Accumulated ‘hands-on experience’ from previous projects.
  • Final evaluation including the summing up of experience gathered

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Organization and management

As previously mentioned the company is affiliated to
The Danish Construction Association (Dansk
Byggeri)
In the building projects we operate with the following management categories:

  • Project managers in connection with turnkey contracts and partnering. The project manager is responsible for the design and construction management.
  • Construction managers in connection with projects in main contracts. The construction manager represents the client in aspects related to the planning and the implementation of individual trade contracts. In turnkey contracts and in partnering the construction manager refers directly to the project manager. The construction manager has the overall responsibility for all work on site. He supervises the work and is typically responsible for the coordination of building site safety.
  • Individual trade contract managers/clerks of work (CoW) in
    connection with individual trade contracts carried out as ‘own production’. CoWs refer directly to the construction manager. It is the responsibility of the CoW to ensure that the work is carried out  within the stipulated time schedule and to ensure that the necessary work drawings, materials and equipment are present at the right time in in the specified quantities. It is also the responsibility of the CoW to ensure and to document the quality of the work carried out. Further it is the responsibility of the CoW to ensure that all work is carried out in accordance with current safety regulations and to ensure that Work Place Assessments (WPAs) are implemented.
  • Foremen: Management of workers in ‘own production’. Is in the hands of foremen. The foremen are salaried employees and as such they are not financed through the budget of a particular project.

All managers are qualified safety managers and coordinators. They are also
qualified in the application of the company’s quality assurance system. In
addition, the managers in the company have a well defined (limited) financial
free scope.
Other employees such as craftsmen are organized in gangs, represented by a
ganger.
The company trains safety representatives to the extend necessary.
All craftsmen are trained in the use of the company’s quality assurance
practice.
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Remuneration and conditions of employment

The company has entered an agreement with all staff groups and has an  interest in implementing incentive payment systems at all levels.
All members of staff have an employment contract stipulating  job description, remuneration and other conditions.
The company estimates social costs on the basis of current legislation and existing agreements and based on expenditure during the past year.
All time work should be carried out on the basis of a piece-work contract and we recommend the use of schedules of  wages and time elaborated for each trade. The company has  established an extensive ‘time data base’ to be used when assessing the time required for each task.
All staff sign an employment contract stating job description, renumeration conditions and other conditions.
In this context it is important to notice observance of ‘Lov om ansættelsesbeviser‘.
Additional information concerning remuneration and employment conditions  may be found this homepage 3F (union for unskilled workers)
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Communication and logistics

It is considered important that documents, drawings and goods have a continous and well organized flow through the company at all levels. In order to secure this the company applies tools available.
In the case of turnkey contracts, a CAD manual is used in order to organize the drawings.
We recommend the use of BIPS folder structure when organizing documents.
In cases where the building project is web based, it is important to ensure that all parties involved are well trained and informed concerning the terms for document handling.
In the area of resource management it is important that all trade contractors are informed about the space made available to each one of them at the building site – as well as space available for vertical and horizontal transport at the site.
Rolling order – renouncement and supply plans shall be elaborated corresponding to work progress.
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Quality assurance and management

The company has a well-developed quality assurance system to be used irrespective of the chosen contract form. In this booklet we will use the tools elaborated by The Danish Construction Association.
Staff members responsible for quality assurance are all trained in the routines and use of forms worked out by the company. Construction management is well-prepared at start-up meetings – whether meetings are called by themselves or have been organized on client’s request.
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Environment- and safety management

When it comes to safety and an environmental profile, the company is very ambitional and aspires to receive working environment certification (arbejdsmiljøcertificeret).
Work Place Assessment (WPA) has been elaborated for all staff groups. All staff members with management responsibilities are trained safety managers. All involved parties know their duties – whether they are clients, consultants or  employers. All parties are capable of undertaking the coordination of safety work. They are also able to work out a Plan for Health and Safety (PHS). The company possesses the equipment necessary in order to carry out dangerous work, and the construction management is capable of giving required instruction in the handling of this. A Work Place Assessment (WPA) is carried out every time dangerous work is carried  out. All employees must undergo training and hold certificates as required by
The Danish Working Environment Authority (Arbejdstilsynet). When organizing safety work on the building site the company uses the so-called ‘exemplary work place’ as a tool.
A safety organization with a size corresponding of the number of companies, trades and employees is established on the building site.
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Financial aspects

The company budget envisages the management’s expectations in relation to expected turnover as it is distributed on own production, sub-contractors and additional jobs. Social costs are calculated on the basis of specific company expenditure, agreement terms and legislation governing the area.
When a building project starts the company management works out a cash budget showing capital needs during the building project in question. A chart account is also elaborated.
Depending on the extent of the building project, interim calculations and project stage assessments are elaborated as the project progresses.
Final calculations are carried out at the conclusion of a building project.
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Tender

The company participates in tenders as individual trade contractors as well as main-and turnkey contractors. In the case of individual trade contracts the company management calculates directly on the basis of quantities specified in the tender documents  as well as registered site conditions.
Main contract tenders are based on: Calculation of own production cost, tenders received from sub-contractors and an assessment of additional costs in relation to the project in question.
Turnkey contract tenders are calculated on the basis of accumulated company experience (costs of similar projects already implemented) or by the use of successive calculation – unless it is a tender in accordance to fixed budget. In connection with the submissions of tenders, a risk analysis is always carried out in this company.
The contribution ratio is defined on the basis of company overhead costs and the expected profit.
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CEC-construction evaluation centre

The company has a keen interest in entering into competition on large public projects and therefore aspires to conform to demands for contractors and designers as defined by The Construction Evaluation Centre (BEC).
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Own production

When it comes to own production, the company normally uses employees who have been affiliated with the company for a longer period of time and with whom the company has an agreement. In cases where the company undertakes building projects outside the normal field of practice, it may be necessary to employ staff from outside the company. In such cases it is necessary to carry out a risk assessment.
The company does not own large scale equipment, such as heavy construction equipment, shuttering and scaffolding. The company only possesses ordinary hand tools – all other equipment is hired.
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Summing up experience

Construction projects inevitably generate enormous and complex amounts of experience. In most cases this experience is held by a few persons only. Consequently, a lot of knowledge vanished when members of staff left the company.
At present the company makes a systematic summing up of experience to be used by cost accountants, clerks of work, construction managers and project managers.
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Legal aspects

When a company tenders, a number of legal aspects should be considered. More information concerning this issue may be found in the section ‘Legal scrutiny’.

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